Silver (XAG) Daily Forecast: Prices Surge to $26.96 – More Gains Ahead?

Silver Prices Rise on Weak Dollar, Fed Rate Cut Speculation

The broad-based US dollar has been under pressure, struggling to gain traction as recent economic data revealed a faster-than-expected economic slowdown. This weaker outlook has sparked speculation about more significant interest rate cuts by the Federal Reserve, boosting the appeal of non-yielding assets like silver.

Government figures released on Tuesday showed a 2.5% reduction in the US trade deficit, falling to $73.1 billion in June from $75.0 billion in May, driven by a 1.5% rise in exports of aircraft and US-produced oil and gas.

Markets now fully expect the Federal Reserve to reduce borrowing costs by 25 basis points at the September policy meeting, with speculation of a larger 50-basis-point cut due to concerns over an economic downturn in the US.

The weaker US dollar and expected rate cuts enhance silver’s appeal as a non-yielding asset, supporting its price amid economic uncertainties and a reduced trade deficit.

Silver Prices Surge Amid Middle East Tensions and China’s Economic Concerns

Escalating Middle East tensions and concerns about China’s economy are boosting silver prices. Intense Israeli attacks on Gaza have resulted in significant destruction, including fires in refugee tents and residential buildings. The Israeli military has ordered evacuations in northern Gaza ahead of a major operation. The Palestinian Prisoner’s Society is calling for a UN investigation into alleged abuses in Israeli prisons.

Meanwhile, the WHO warns that Israel’s assault hampers efforts to prevent a polio outbreak in Gaza. Hezbollah and Iran are considering responses to Israeli actions, with Hezbollah vowing retaliation for recent attacks. The US is trying to prevent further escalation, but ceasefire talks have stalled. Analysts believe both Israel and Iran aim to avoid a full-scale regional war while maintaining a restrained approach.

Thus, escalating Middle East tensions and ongoing conflicts are driving up silver prices as investors seek safe-haven assets. The destruction in Gaza, calls for international investigations, and the threat of broader regional conflict increase silver’s appeal as a stable investment amidst geopolitical uncertainty.

Short-Term Forecast