• Silver price slumps to near $56.70 in Tuesday’s Asian session, pressured by some profit-taking. 
• US interest rate cut hopes and supply fears might help limit the Silver price’s losses. 
• Markets are fully pricing in a quarter-point rate cut from the Fed in the December meeting. 

Silver price (XAG/USD) falls to around $56.70 during the Asian trading hours on Tuesday. The white metal faces some profit-taking after reaching a record high in the previous session. However, expectations that the US central bank will cut interest rates further this month and persistent concerns over global supply tightness might cap its downside. 

Silver retreats from an all-time high reached on Monday as traders book some profit ahead of the key US economic data later this week. The surge in the Silver price on the previous day was due to a 10-hour outage at CME Group’s data center in Illinois caused by a cooling-system failure.

Increased expectations that the US Federal Reserve (Fed) will cut interest rates in its December policy meeting could provide some support to the XAG/USD. Markets are fully pricing in a 25 basis points (bps) rate reduction on continued weakness in the US labor market and dovish remarks by Fed officials over the last week. Lower interest rates could reduce the opportunity cost of holding Silver, supporting the non-yielding precious metal.

The white metal continues to face supply pressures from global centers following last month’s historic squeeze in London. The recent data reveal that silver inventories in warehouses linked to the Shanghai Futures Exchange fell to their lowest level in over a decade. 

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