Silver (XAG) Daily Forecast: Can Silver Hold $30.50 as Fed Cuts Rates by 50bps?

Market Overview

Silver prices (XAG/USD) broke their losing streak, climbing to $30.68, driven by surging demand from China’s rapidly growing solar panel and technology industries. Silver prices in China are currently around 10% higher than Western markets, highlighting the significant local demand.

In both June and July 2024, China’s silver imports surpassed 400 tons, a notable increase compared to last year’s figures. This rising demand is a major factor in silver’s recovery, providing solid support for the metal in global markets.

Impact of the Fed’s 50 Basis Point Rate Cut

The Federal Reserve’s surprise 50 basis point interest rate cut further fueled silver’s rally. While markets anticipated a 25 basis point cut, the Fed took a more aggressive stance, signalling its confidence in meeting the 2% inflation target.

This move has weakened the US dollar, making silver more attractive to investors seeking safe-haven assets. Historically, silver prices tend to follow gold, which has also experienced gains due to the Fed’s monetary easing.

Outlook for Silver Amid Fed’s Policy and Global Demand

With the Fed hinting at two to three more rate cuts in 2024, the weakened dollar could continue to boost silver prices in the near term. The US dollar’s depreciation typically makes commodities like silver more appealing to investors.

As global demand—particularly from China—remains robust, silver prices could see further upward movement. However, investors should remain cautious, as any shift in Fed policy or economic outlook could impact the metal’s trajectory.

Short-Term Forecast

Silver (XAG/USD) shows strong bullish momentum, trading at $30.68 after breaking its recent losing streak. Rising demand from China’s solar panel and tech industries, along with the Fed’s surprise 50 basis point rate cut, continues to support prices.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD)  is trading at $30.68, up 1.17%, showing positive momentum. The price hovers above its pivot point at $30.50, indicating a bullish sentiment in the market. Immediate resistance levels are seen at $30.80, $31.10, and $31.42.

On the downside, key support levels stand at $30.12, followed by $29.82 and $29.53. The 50-day EMA at $29.93 is supporting the upward trend, with the 200-day EMA at $29.21 reinforcing a broader bullish outlook.

Technically, the formation of three white soldiers on the 4-hour chart suggests further buying pressure. As long as Silver holds above $30.50, the trend remains positive, but a break below could trigger sharp selling.