Silver (XAG) Daily Forecast: Prices Nears $28; Triangle in Play

Traders remain cautious ahead of major central bank meetings. The Federal Open Market Committee (FOMC), Bank of Japan, and Bank of England are set to announce their policy decisions this week.

Key macro data, including US Nonfarm Payrolls, Chinese PMIs, and Eurozone inflation figures, will also influence USD and XAG/USD trends.

Easing Inflation and Weaker USD Drive Silver Prices Higher

The broad-based US dollar is losing ground as market participants expect the Federal Reserve to cut rates in September. This anticipation has weakened the USD and supported higher silver prices.

Recent data showing easing inflation pressures, including a 0.1% rise in the Personal Consumption Expenditures (PCE) Price Index for June and a 0.2% increase in the core PCE Price Index, has reinforced expectations of an upcoming Fed policy easing cycle.

Consequently, subdued US Treasury bond yields have further boosted silver prices, as the opportunity cost of holding non-yielding assets like silver decreases.

Geopolitical Tensions Boost Silver Prices Amid Middle East Conflicts

Rising geopolitical tensions, especially ongoing conflicts in the Middle East, are driving silver prices higher as investors seek safe-haven assets. Recent clashes involving Israel and Hezbollah, along with the humanitarian crisis in Gaza, have increased market instability.

The call for a ceasefire amid fears of a polio outbreak and continued violence has further intensified demand for silver as a hedge against uncertainty.

Consequently, escalating geopolitical risks and the search for stability have led to increased buying of silver, pushing its prices higher amid growing global uncertainties.

Short-Term Forecast