Silver (XAG) Daily Forecast: Price Hits $30.80, Trendline to Limit Upside?

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Published: Jul 16, 2024, 06:30 GMT+00:00

Key Points:

Silver (XAG/USD) rises to $30.80, up 0.43%, driven by Fed rate cut expectations.
Fed rate cut expectations boost silver, holding above key pivot point $30.87.
Silver's potential breakout above $30.87 targets $31.24, with selling below this level likely.

Silver (XAG) Daily Forecast: Price Hits $30.80, Trendline to Limit Upside?

Market Overview

Silver prices currently stand at $30.81, reflecting an increase of 0.43%. This upswing is largely attributed to expectations that the Federal Reserve will initiate a rate-cutting cycle starting in September, a sentiment supported by recent comments from Fed Chair Jerome Powell.

These developments have led to lower U.S. Treasury yields, which typically benefit precious metals that do not offer yields.

Impact of U.S. Monetary Policy on Silver Prices

The anticipation of reduced U.S. interest rates has traditionally favoured silver, as lower yields on bonds make non-yielding assets more attractive.

This scenario is underscored by the Fed’s recent indications that it might lower borrowing costs sooner than later if inflation targets are approached sustainably.

Political Events Influencing Market Sentiment

The recent failed assassination attempt against Donald Trump has potentially increased his chances of election success in 2024, fostering expectations of a less regulated market environment.

While this might boost general market sentiment towards riskier assets, it could also temper gains for traditional safe havens like silver, especially if regulatory constraints are minimized.

Dollar Strength and Market Movements

Despite a modest strengthening of the U.S. dollar, influenced by projections of growing government debt and inflation under potential future Trump policies, silver has maintained its upward trajectory.

However, the stronger dollar could limit substantial gains in silver prices as it increases the cost of commodities priced in USD for foreign investors.

Economic Indicators and Silver’s Outlook

Upcoming U.S. Retail Sales data, expected to show minimal growth, could influence Federal Reserve decisions, impacting silver prices.

With core sales projected to rise slightly, market watchers will be keen to assess how these figures might affect Fed policy adjustments.

Short-Term Forecast

Silver (XAG/USD) at $30.80, up 0.43%, could see further gains if the pivot point at $30.87 is maintained. A breakout above this level targets $31.24, while a drop below could trigger selling.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

Silver (XAG/USD) is currently priced at $30.80, up 0.43%. The 4-hour chart identifies key levels with a pivot point at $30.87. Immediate resistance is seen at $31.24, followed by $31.53 and $31.76.

Support levels are at $30.56, $30.20, and $29.88. The 50-day EMA is $30.84, while the 200-day EMA stands at $30.38. The pivot point at $30.87 aligns with a downward trendline.

A bullish breakout above this level could drive prices higher, targeting the next resistance. However, a break below $30.87 could trigger a sharp selling trend.

About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.