Silver (XAG) Daily Forecast: Closing in on $27.75—Can It Surge to $28.50?

This conflict underscores silver’s appeal as a safe investment during periods of uncertainty.

Silver Gains as Dollar Weakens, Rate Cut Expectations Drive Market Sentiment

The US dollar is losing momentum as expectations grow for a Federal Reserve rate cut in September, which is supporting silver prices. Investors are closely monitoring upcoming data, including US Retail Sales, Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production.

Recent inflation data for July showed a 0.2% increase in the Consumer Price Index (CPI) month-over-month, with an annual rate of 2.9%. Core CPI, excluding food and energy, also rose by 0.2% month-over-month and 3.2% annually.

Phillip Streible from Blue Line Futures notes that expectations have shifted towards a 25 basis point rate cut rather than 50, dampening silver’s momentum. The probability of a 50 basis point cut has decreased to 41% from 50% before the CPI data release. Cautious Fed officials and the reduced likelihood of a larger cut are adding uncertainty to silver markets.

Gaza Conflict Escalation May Drive Silver Demand as Safe-Haven Asset

Israeli airstrikes hit Hamad City, and artillery damaged buildings in Khan Younis, Gaza, following recent deadly attacks. The US and Israel are sending delegations to Qatar for ceasefire talks, with Hamas open to discussions if Israel shows serious intent.

US Secretary of State Antony Blinken and Qatar’s Prime Minister urged restraint to support negotiations. In the West Bank, Israeli raids killed five, including four in a drone strike, contributing to the conflict’s toll of 39,965 deaths and 92,294 injuries in Gaza.

The escalating conflict and ongoing violence in Gaza could drive investors toward safe-haven assets like silver. This heightened geopolitical uncertainty may boost demand for silver, supporting its price.