Silver (XAG) Daily Forecast: Bullish Start, Price Hits $29.70

Silver price (XAG/USD) began the week bullishly, reaching an intraday high of $29.69 after gaining traction around $29.57. The rally is driven by expectations of a Fed rate cut in September, which has lowered US Treasury bond yields, boosting silver prices.

Additionally, risk-off sentiment, geopolitical tensions, and political uncertainty in Europe are supporting silver’s safe-haven appeal. However, stronger-than-expected US PMIs have strengthened the US dollar, which may limit silver’s gains.

Silver Price Rises Amid Fed Rate Cut Expectations

Despite stronger-than-expected US PMIs and the Federal Reserve’s hawkish stance, the US dollar turned bearish, likely due to bets on a Fed rate cut in September. Although the Fed forecasts only one rate cut in 2024, markets anticipate two cuts this year amid easing inflation.

The CME Group’s FedWatch Tool indicates a 60% chance of a rate cut at the September meeting, weighing on US Treasury bond yields and boosting silver prices.

Traders remain cautious ahead of this week’s crucial US macroeconomic releases, including the final Q1 GDP print and the Personal Consumption Expenditures (PCE) Price Index. Comments from FOMC members will be closely monitored for trading cues.

US composite PMI rose slightly from 54.5 in May to 54.6, its highest level since April 2022. Input prices declined to 56.6 from 57.2, while output prices slowed to 53.5, showing some of the smallest increases in four years.

In summary, silver prices have benefited from increased bets on Fed rate cuts, easing inflation concerns, and a weaker US dollar, supported by market uncertainty and upcoming key economic data releases.

Geopolitical Tensions and Political Uncertainty Boost Silver

A security agreement between Russian President Vladimir Putin and North Korean leader Kim Jong-un has heightened geopolitical tensions, raising concerns about escalating risks.

French President Emmanuel Macron’s announcement of snap elections has added to political uncertainty in Europe, which supports safe-haven assets like precious metals.

Thus, the geopolitical tensions from the Russia-North Korea pact and European political uncertainty could increase demand for silver as a safe-haven asset amid heightened global instability.

Short-term Forecast

Silver (XAG/USD) remains bullish, reaching $29.69 driven by Fed rate cut expectations. Geopolitical tensions and political uncertainty in Europe support silver’s safe-haven appeal. Strong US PMIs might cap further gains.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $29.57, up 0.05%. The pivot point is at $29.35, marked by the green line. Immediate resistance levels are at $30.01, $30.27, and $30.63, indicating potential upward momentum.

On the downside, immediate support is found at $29.17, with further support at $28.94 and $28.66. The 50-day Exponential Moving Average (EMA) stands at $29.80, while the 200-day EMA is at $29.54.

These technical indicators suggest a bullish outlook above $29.35. However, a break below this level could trigger a sharp selling trend.