Silver (XAG) Daily Forecast: Nears $27 Amid Easing Geopolitical Tensions

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Published: Apr 23, 2024, 07:11 UTC

Key Points:

Silver prices drop to $27.03, down 0.48%, amid reduced geopolitical risks.
Investors shift focus from safe havens due to easing Middle East tensions.
U.S. dollar strength from Fed rate outlook pressures silver downward.

Market Overview

Silver prices (XAG/USD) continued their decline, hovering around $27.03 and reaching an intra-day low of $26.78. This downward trend is largely due to diminishing geopolitical tensions in the Middle East, which has improved overall risk sentiment and reduced the demand for safe-haven assets, impacting silver prices.

Concurrently, expectations of fewer Federal Reserve rate cuts have bolstered the US dollar, adding pressure to silver prices. Looking forward, traders are keenly awaiting global PMI figures, the US Q1 GDP report, and the PCE Price Index.

The upcoming release of these significant economic indicators could influence silver prices, reflecting market reactions and shifts in investor sentiment.

Impact of Easing Middle East Conflict Concerns on Silver Prices

On the geopolitical front, reduced concerns about Middle Eastern conflicts are enhancing market confidence and steering investors away from safe-haven assets like silver.

Iran’s decision not to retaliate against Israel’s recent limited-scale missile strike has further relaxed tensions, contributing to gold’s price drop for the second consecutive day on Tuesday.

This reflects an improved risk sentiment among traders, who are now prioritizing economic data releases and global PMI reports to determine market trends and inform investment decisions.

As fears over Middle Eastern conflicts abate, silver prices are falling as investors shift away from safe-haven assets.

Impact of Fed Rate Expectations on US Dollar and Silver Prices

In the US, reduced expectations for Federal Reserve interest rate cuts are bolstering the dollar and elevating silver prices. Recent robust US payroll figures, increased consumer price inflation, and hawkish remarks from the Fed have led investors to scale back expectations for rate reductions.

Market forecasts now anticipate possible rate cuts beginning in September, with fewer cuts than previously expected. This outlook has strengthened the US dollar and contributed to higher silver prices.

Looking forward, traders remain cautious, awaiting flash PMI data for insights into global economic health that could influence demand for safe-haven assets. Focus is also on the forthcoming Advance US Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index.

Silver (XAG/USD) Price Forecast

Silver Price Chart

Silver prices are currently positioned at $27.03, marking a decline of 0.48%. The metal is trading below its pivotal point of $27.56, suggesting potential downward pressure. Immediate resistance lies at $28.79, with subsequent levels at $29.57 and $30.51 potentially capping upward movements.

Support levels are identified at $26.52, followed by stronger floors at $25.68 and $24.72, which may act as buffers against further declines. The technical setup, highlighted by the 50-day EMA at $27.93 and the 200-day EMA at $26.39, suggests a bearish bias below $27.56. A push above this threshold could, however, tilt the bias back towards bullish.

About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.