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Silver (XAG) Daily Forecast: Prices Hover Around $30.89 as CPI Data Looms

By:
Arslan Ali
Published: Jul 8, 2024, 06:55 GMT+00:00

Key Points:

  • Silver (XAG/USD) trades around $30.89, influenced by a stronger US dollar.
  • Traders await Jerome Powell's testimony and US CPI data for future market direction.
  • Maintaining above $30.80 is crucial to sustain the bullish outlook.
Silver (XAG) Daily Forecast: Prices Hover Around $30.89 as CPI Data Looms

In this article:

Silver (XAG/USD) continued its downward trend, trading around $30.89 after hitting an intraday low of $30.83. This decline is due to several factors. Firstly, the US dollar strengthened despite growing expectations for a Federal Reserve rate cut in September.

Additionally, a shift towards riskier assets contributed to the downward pressure on silver, often sought as a safe haven.

Looking ahead, traders are closely monitoring Federal Reserve Chair Jerome Powell’s testimony on Tuesday and the release of US June Consumer Price Index (CPI) inflation data on Thursday for further market direction. 

US Economic Data and Fed Speculation Influence Silver Prices

The broad-based US dollar managed to stay positive despite growing speculation that the Federal Reserve might cut interest rates in the third quarter. This speculation could help limit silver’s losses. Recent employment data bolstered expectations of a rate cut in September, with markets now pricing in a 77% probability, up from 70% before the latest report.

US Nonfarm Payrolls rose by 206,000 in June, surpassing the expected 190,000, following a revised 218,000 increase in May. The Unemployment Rate increased to 4.1% from May’s 4%. Average Hourly Earnings fell to 3.9% year-over-year in June from 4.1% in May, matching market predictions.

Consequently, the positive Nonfarm Payrolls report and expectations of a Fed rate cut supported the US dollar, putting pressure on silver, which traded near $30.89, as investors considered economic data and upcoming Fed decisions.

Short-term Forecast

Silver (XAG/USD) is expected to face downward pressure, trading around $30.89. Traders are watching Jerome Powell’s testimony and CPI data for future market direction. Maintaining above $30.80 is crucial to avoid further declines.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver - Chart
Silver – Chart

Silver (XAG/USD) is trading at $30.89, down 0.51% in the 4-hour timeframe. The pivot point at $30.83 is crucial. Immediate resistance levels are at $31.22, $31.48, and $31.70. Support levels are seen at $30.52, $30.26, and $30.01.

Technical indicators show the 50-day EMA at $30.40 and the 200-day EMA at $29.84, suggesting a bullish trend above $30.83. However, a break below this pivot could lead to significant selling pressure.

Therefore, maintaining above $30.80 is critical to sustain the bullish outlook.

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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.

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