Silver (XAG/USD) prices surged nearly 1% to near $31.50 during European trading hours on Monday (03/03). The white metal strengthened as rising Federal Reserve (Fed) dovish bets weighed on the US Dollar (USD).

The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, extended its decline after a three-day rally and dipped near 107.00.

According to the CME FedWatch tool, there is a 77% chance that the Fed will cut its benchmark lending rate in June, up from 63% a week ago. In its March and May policy meetings, the Fed was almost certain to keep rates unchanged in the range of 4.25%-4.50%.

Traders have raised bets in favor of the Fed cutting its benchmark lending rate in June after US Personal Spending data fell for the first time in two years in January.

For further clues on the Fed's monetary policy outlook, investors will focus on a series of US economic data, especially the Nonfarm Payrolls (NFP), due later this week.

Meanwhile, concerns over US President Donald Trump's tariffs on Canada, Mexico and China have also boosted demand for safe-haven silver. On March 4, Trump was ready to impose tariffs on these countries for bringing illegal drugs into the US economy. (Newsmaker23)

Source: FXstreet