Silver (XAG) Daily Forecast: Prices Hit $29.73 Intraday High, Buy Now?

By:

Arslan Ali

Published: May 17, 2024, 07:36 GMT+00:00

Key Points:

Silver (XAG/USD) prices hold a bullish trend around $29.71, hitting $29.73 intraday.
Softer-than-expected US inflation data boosts silver amid hopes for Federal Reserve rate cuts.
Investors await speeches from Fed officials for insights into future monetary policy.

In this article:

Silver

-0.28%

Market Overview

Silver prices (XAG/USD) have maintained a bullish trend around $29.71, reaching an intraday high of $29.73. This upward movement is driven by increased demand for silver as a safe-haven asset amid global uncertainties. Investors typically turn to precious metals like silver during economic or geopolitical instability, supporting its price.

Additionally, softer-than-expected US inflation data for April has sparked hopes for potential rate cuts from the Federal Reserve, further boosting silver prices. Currently, traders are hesitant to take strong positions due to the lack of significant economic data from the US. Instead, they are focusing on speeches by Federal Reserve officials, including Kashkari, Waller, and Daly, for potential insights into the Fed’s future monetary policy direction.

Impact of Economic Data and Fed Stance on Silver Prices

Softer-than-expected US inflation data in April raised hopes for Federal Reserve rate cuts, boosting silver prices. However, recent comments from Fed officials suggest a cautious approach to cutting interest rates.

Atlanta Fed President Raphael Bostic noted signs of cooling inflation but wants more data. Cleveland Fed President Loretta Mester believes current policy is appropriate, while Richmond Fed President Tom Barkin stresses the need to maintain high borrowing costs.

Financial markets predict a 75% chance of a Fed rate cut in September, with full cuts expected by year-end.
US weekly Initial Jobless Claims rose to 222K for the week ending May 11, surpassing the 220K estimate.
Housing Starts increased by 5.7% month-over-month in April, while Building Permits fell by 3%.

The mixed economic data and cautious Fed stance add uncertainty, potentially supporting silver prices as investors seek safe-haven assets amid concerns over economic recovery.

Silver (XAG/USD) Price Forecast

Silver Price Chart

Silver is trading at $29.58, up 0.21% for the day. On the 4-hour chart, the pivot point at $29.47 serves as a critical support level. Immediate resistance is at $30.14, followed by $30.59 and $31.12. On the downside, immediate support is at $29.08, with further support at $28.51 and $27.92.

Technical indicators show the 50-day Exponential Moving Average (EMA) at $28.54 and the 200-day EMA at $27.35, indicating a bullish trend. The upward trendline suggests continued buying interest above the pivot point.

Conclusion: Silver remains bullish above $29.47. A break below this level could trigger a sharp selling trend.

About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

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