Silver (XAG) Daily Forecast: Prices Plunge to $29.50 – Is It Time to Sell?

By:

Arslan Ali

Published: Jul 19, 2024, 07:00 GMT+00:00

Key Points:

Silver prices decline to $29.52, pressured by a strong US dollar and profit-taking.
Rising unemployment claims and a strong US dollar weigh on silver, despite Fed cut expectations.
Geopolitical tensions, including Middle East conflicts, may support silver prices as a safe haven.

In this article:

Silver

-0.96%

Market Overview

Silver prices (XAG/USD) continue their downward trend, set to close the week on a bearish note around $29.52, with an intraday low of $29.38. This decline is largely due to the resurgence of the US dollar, which has strengthened despite expectations of a Federal Reserve rate cut in September.

Cautious market sentiment, fueled by escalating geopolitical tensions, might offer some support to silver prices. However, the prevailing strength of the US dollar is overshadowing these potential supports, creating a challenging environment for silver.

Silver Prices Fall Amid US Dollar Strength and Rising Unemployment Claims

Despite expectations for a Federal Reserve rate cut in September, the US dollar has gained strength, driving silver prices lower. Recent data from the Bureau of Labor Statistics shows a rise in unemployment claims to 243,000, marking the highest 4-week average in over two and a half years, signaling a weakening job market.

This, combined with decreasing inflation, suggests that the Fed might soon begin its rate cuts. Positive US manufacturing data and market predictions point to a 100% probability of a rate cut in September, with two more cuts expected by the end of the year.

The US dollar’s strength and increased unemployment claims are pressuring silver prices lower. However, expectations for Fed rate cuts and strong manufacturing data could offer some support.

Geopolitical Tensions and Humanitarian Crisis Could Boost Silver Prices Amid Decline

Former President Donald Trump’s comments about Taiwan paying the US for defense have raised doubts about America’s willingness to protect Taiwan from China. This uncertainty, along with ongoing conflicts in the Middle East and the Russia-Ukraine war, could support silver prices as investors seek safe-haven assets.

In the last 24 hours, Israel’s intensified strikes on Gaza have killed at least 54 Palestinians, worsening the humanitarian crisis. Israel has drastically reduced Gaza’s water supply, creating severe health issues. Saudi Arabia criticizes the attacks as violations, and fears of a broader Middle East conflict grow.

The geopolitical uncertainty, including doubts about US support for Taiwan and escalating Middle East conflicts, could boost silver prices as investors seek safety. However, silver’s recent decline is due to a strong US dollar.

Short-Term Forecast

Silver (XAG/USD) is likely to remain bearish around $29.52, pressured by a strong US dollar. However, geopolitical tensions might offer some support, potentially stabilizing prices.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

Silver (XAG/USD) is trading at $29.52, reflecting a 0.79% decline. On the chart, the pivot point is at $29.82. Immediate resistance levels are at $30.13, $30.56, and $31.01. Immediate support is at $29.26, with further support at $28.96 and $28.58.

The 50-day Exponential Moving Average (EMA) is at $30.44, and the 200-day EMA is at $30.41, indicating a bearish trend as prices remain below these averages.

The outlook is bearish below $29.80, but a break above this level could signal a bullish trend. Monitoring these key levels is crucial for trading decisions.

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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