Silver (XAG) Daily Forecast: Soars to $28.60 Amid Weaker DXY – Buy Now?

Geopolitical Concerns Amplify Silver’s Appeal

Investors are particularly focused on Israel’s potential responses to Iranian provocations. The uncertainty of conflict escalation in this region has played a pivotal role in the recent silver price rally. Any further signs of conflict could intensify this trend, as silver traditionally benefits during times of increased market volatility and geopolitical risk.

Impact of US Dollar on Silver Prices

The weakening US Dollar continues to be a significant factor behind silver’s bullish performance. As the dollar, that lost nearly 0.50% to trade at $105.85, becomes less expensive in other currencies, commodities priced in dollars, like silver, become more accessible to international investors, thus boosting demand.

Federal Reserve Policies: A Dual-Edged Sword

Looking forward, the Federal Reserve’s monetary policies will be crucial in shaping the trajectory of both the US Dollar and silver prices. Although the Fed has maintained a hawkish stance to combat inflation, suggesting potential tightening of monetary policy, any indication of prolonged high inflation or delayed rate hikes could temper the strength of the US Dollar.

Fed Chair Jerome Powell’s recent remarks suggest a slow progression towards the inflation target, implying that high-interest rates may persist longer than anticipated, which could sway investor preference towards safe-haven assets like silver, despite a generally strengthening dollar.