Silver (XAG) Daily Forecast: Key Support at $29.68 – Will It Hold?

Market Overview

Silver (XAG/USD) prices slipped to $29.86 on Thursday, pressured by a stronger US dollar and reduced demand for safe-haven assets. Geopolitical tensions in the Middle East have shown signs of easing, further reducing investor interest in Silver, typically sought during global instability.

Geopolitical Easing Reduces Safe-Haven Appeal

The recent ceasefire between Israel and Hezbollah has eased regional tensions, lowering market fears and reducing the demand for Silver. While some uncertainties persist due to ongoing military actions in Gaza, the geopolitical risks appear less acute.

As stability improves, investors are pivoting away from safe-haven assets, including Silver, leading to further price declines.

US Dollar Strength and Inflationary Pressures Weigh on Silver

The US dollar edged higher after Wednesday’s release of strong inflation data. The Personal Consumption Expenditures (PCE) Price Index, a key inflation measure, rose to 2.3% in October, up from 2.1% in September.

Core PCE, excluding volatile food and energy prices, increased to 2.8%, slightly above the prior month’s 2.7%.

These figures, coupled with robust consumer spending, have prompted the Federal Reserve to maintain a cautious stance on interest rate cuts. The central bank’s hesitancy strengthens the dollar, which inversely pressures Silver prices.

Fed Minutes Signal Continued Watchfulness

Minutes from the Federal Reserve’s November meeting revealed a focus on inflation and labor market resilience. With inflation steady and the labor market strong, the Fed is unlikely to cut rates soon.

This cautious policy stance boosts the dollar and diminishes demand for non-yielding assets like Silver.

Short-Term Forecast

Silver prices remain under pressure near $29.86, with $30 acting as a key pivot. A break above $30.27 may spark recovery, while support at $29.68 signals bearish risks.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver prices are trading at $29.86, down 0.82%, as bearish sentiment persists below the $30 pivot point. The 4-hour chart shows immediate resistance at $30.27, with additional hurdles at $30.47 and $30.71, the latter aligning with the 200-day EMA.

The 50-day EMA, at $30.30, further underscores short-term resistance levels. A decisive break above $30 could trigger bullish momentum, targeting these resistance zones.

On the downside, support is seen at $29.68, with deeper levels at $29.45 and $29.25 providing potential cushions. A sustained drop below $29.68 could signal continued bearish momentum. The double-bottom breakout near $30 is pivotal, marking a potential trend reversal if reclaimed.