Silver (XAG) Daily Forecast: Hovering at $28.20—Triangle Breakout Signals a Buy

Traders are monitoring upcoming US economic indicators, including Building Permits, Housing Starts, and the Preliminary Michigan Consumer Sentiment Index, for short-term trading signals.

US Dollar Stalls as Strong Data Fuels Fed Rate Cut Expectations for September

The US dollar struggled to gain momentum as markets have already priced in a 25 basis point rate cut at the Federal Reserve’s September meeting. This expectation has led to a modest pullback in US Treasury yields, tempering the dollar’s gains despite strong economic data, including better-than-expected July retail sales and a resilient labor market.

Federal Reserve officials, including Atlanta Fed President Raphael Bostic and St. Louis Fed President Alberto Musalem, have hinted that a rate cut might be necessary soon due to easing inflation and shifting economic risks, creating uncertainty about the dollar’s future performance.

The US Census Bureau reported a 1% increase in retail sales for July, surpassing the expected 0.3% rise. Excluding autos, sales rose 0.4%, above the anticipated 0.1% gain.

Additionally, initial jobless claims for the week ending August 10 totaled 227,000, better than the expected 235,000 and the previous week’s 234,000. These figures highlight the resilience of the US economy and support the view that the labor market remains robust.

Stronger US economic data and expectations of a Fed rate cut have reduced the dollar’s bullish momentum, potentially limiting silver’s downside. However, concerns about geopolitical risks and potential policy shifts may still provide support for silver prices.

Geopolitical Tensions Elevate Silver Prices as Investors Turn to Safe Haven

Ongoing tensions in the Middle East and the Russia-Ukraine conflict have driven silver prices higher. The situation in the Middle East intensified following the assassination of a Hamas leader in Tehran and continued ceasefire talks in Doha. Russia has also announced plans to strengthen its military presence in response to a major Ukrainian attack.

Recent violence in Gaza and the West Bank has further escalated concerns. Amid these uncertainties, investors increasingly turn to silver as a safe-haven asset, boosting its appeal and driving prices upward. Combining these geopolitical conflicts and market anxieties has made silver more attractive to those seeking stability.