Silver (XAG) Daily Forecast: Price Climbs Above $27; Bullish Momentum Building?

US Dollar Rises Despite Weak Economic Data and Geopolitical Tensions

Despite expectations for significant Federal Reserve interest rate cuts, the US Dollar (USD) has strengthened due to rising Treasury bond yields, which also constrain silver’s potential gains. Recent data showing weaker manufacturing and job growth have raised recession concerns, driving Treasury yields to their lowest levels since mid-2023.

Traders anticipate a 50-basis-point Fed rate cut in September. However, San Francisco Fed President Mary Daly stated that the job market slowdown is not alarming, emphasizing the Fed will balance employment and price stability.

The mixed data have pressured silver prices, as a stronger USD and rising yields limit gains despite expected Fed rate cuts.

Geopolitical Tensions in the Middle East Drive Safe-Haven Demand for Silver

On the geopolitical front, the ongoing Middle Eastern conflicts are likely to support silver prices as a safe haven. Meanwhile, the tensions have escalated with Iran, Hamas, and Hezbollah vowing retaliation against Israel after the assassination of Hamas leader Ismail Haniyeh in Tehran.

Recent violence has resulted in at least 40 deaths and 71 injuries in Gaza from Israeli attacks, while child malnutrition in the Gaza Strip has surged nearly 50% from June to July. The UN has called for urgent de-escalation to prevent further conflict.

Moreover, almost 90 unidentified Palestinian bodies, previously held by Israeli forces, have been returned to Gaza for burial. The ongoing war has resulted in significant casualties, with at least 39,623 people killed and 91,469 wounded in Gaza.