Silver (XAG) Daily Forecast: Around $29.40; Triangle to Signal Breakout

By:

Arslan Ali

Updated: Jun 19, 2024, 08:57 GMT+00:00

Key Points:

Silver (XAG/USD) trends downward, trading around $29.40 with an intraday low of $29.34.
Risk-on sentiment undermines silver, but mixed Fed signals limit deeper losses.
Softer U.S. retail sales and inflation data pressure the dollar, supporting silver prices.

In this article:

Silver

-0.73%

Despite a weaker US dollar, Silver (XAG/USD) continued its downward trend, trading around $29.40 and hitting an intraday low of $29.34. The decline is linked to risk-on-market sentiment, which undermines safe-haven assets like silver.

However, the Federal Reserve’s mixed stance on interest rate cuts has limited deeper losses for silver.

Impact of Weaker US Economic Data on Silver Prices

The US dollar remains under pressure due to weaker retail sales and easing inflation data, increasing market expectations for Federal Reserve rate cuts. Despite the Fed’s hawkish stance, indicating only one rate hike this year, investors are betting on two hikes in 2024.

Softer economic data, including disappointing retail sales and declining inflation, suggest a slowing economy, strengthening the case for the Fed to lower borrowing costs sooner.

The Commerce Department reported that US Retail Sales rose by 0.1% in May, slightly below the expected 0.2% increase. This indicates consumer exhaustion and slowing economic activity. This reinforces expectations that the Fed will lower borrowing costs, pressuring the US dollar and helping limit deeper losses in silver prices.

Impact of Positive Market Sentiment and S&P 500 Highs on Silver Prices

Global market sentiment was positive on Wednesday as the S&P 500 opened higher at 5,487.03, reaching an intraday high of 5,490.38. The S&P 500 hit record highs on Tuesday, driven by strong performances in the technology sector, with Nvidia surpassing Microsoft as the world’s most valuable company.

This surge reflects investor confidence in tech stocks amid broader expectations of potential Federal Reserve rate cuts. U.S. markets will be closed on Wednesday, likely resulting in quiet trading activity.

Positive global market sentiment and strong gains in the S&P 500 negatively impacted silver’s safe-haven appeal.

Short-Term Forecast

Despite a weaker US dollar, Silver (XAG/USD) continues to trend downward, trading around $29.40. Risk-on market sentiment and mixed Fed signals limit deeper losses, keeping silver within a narrow range.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

Silver (XAG/USD) is currently trading at $29.40, down 0.39%. The pivot point at $29.40 is critical for determining the next price movement. Immediate resistance is noted at $29.69, followed by $29.99 and $30.26. On the downside, immediate support is found at $29.03, with further support at $28.67 and $28.37.

The 50-day Exponential Moving Average (EMA) stands at $29.39, while the 200-day EMA is at $29.76. A symmetrical triangle pattern keeps silver’s movement in check. The overall outlook remains bullish above $29.40. However, a break below this level could trigger a sharp selling trend.

About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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