Silver (XAG) Daily Forecast: Prices Near $31; Brace for Uptrend

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Published: Jul 10, 2024, 06:35 GMT+00:00

Key Points:

Silver prices rose to $30.97, driven by Fed rate cut speculation.
Weakening US dollar and global uncertainties boosted silver as a safe-haven asset.
Investors await Powell’s testimony and CPI data for further market direction.

Geopolitical Tensions and Political Uncertainties Drive Silver Prices Higher

Escalating tensions in Gaza, marked by an Israeli air strike that killed 29 Palestinians in a school shelter, have heightened global concerns. This is the fourth strike on such facilities in four days, affecting thousands in Khan Younis and Gaza City and resulting in the closure of three hospitals.

In Europe, increasing uncertainties are contributing to market volatility, exacerbated by France’s surprising election results favouring the New Popular Front (NFP) over the National Rally (NR). Consequently, geopolitical instability is driving investors towards safe-haven assets like silver, boosting its prices.

Fed Rate Cut Hopes Undermine US Dollar and Boost Silver Prices

The US dollar continues to weaken amid speculation that the Federal Reserve could start cutting rates as early as September. This pressure on the USD has supported silver prices. Federal Reserve Chair Jerome Powell emphasized that future interest rate decisions will depend on the latest economic data available at each meeting.

Despite a slight improvement in recent inflation numbers, Powell cautioned against maintaining high interest rates for an extended period, warning it could hinder economic growth. Market sentiment, as measured by the CME FedWatch tool, now suggests a 74% likelihood of a rate cut in September, up from 71% previously.

Therefore, the weakening US dollar and expectations of Fed rate cuts, with a 74% chance for September, have boosted silver prices as investors seek safe-haven assets amid economic uncertainties.

Short-term Forecast

Silver prices are likely to remain supported at around $30.87 due to Fed rate cut speculation and global political uncertainties. However, investors are keenly watching upcoming US CPI data and Powell’s testimony for further market direction.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

Silver (XAG/USD) is currently trading at $30.87, showing a minor decline of 0.28%. The pivot point at $30.58 is crucial, acting as a significant support level reinforced by the 50-day Exponential Moving Average (EMA) positioned at $30.68.

Immediate resistance is observed at $31.12, followed by $31.46 and $31.82. These levels are key in determining if silver can maintain its upward momentum.

On the downside, immediate support lies at $30.58169, with further support levels at $30.26 and $30.01. The 50 EMA at $30.68632 and the 200 EMA at $30.05 are acting as strong support levels, suggesting a robust foundation for potential bullish movements.

About the Author

Bob MasonChief Crypto Boss

TEST 30 He has written extensively for a broader audience and his current focus is on developments relating to the financial markets including, but not limited to currencies, commodities, alternative asset classes, and global equities.