Silver (XAG) Daily Forecast: Trading Above $29; Fed Rate Cut Speculations

Mixed Signals from US Economic Data and Fed Comments

In the US, the broad-based dollar gained traction, advancing to a fresh two-month high following comments by Fed Governor Michelle Bowman. Bowman stated, “We are not at a point yet to consider a rate cut,” citing persistent inflation risks. However, this strength might be short-lived as softer macroeconomic data released on Thursday heightened expectations for a Fed rate cut this year.

Recent data showed US real GDP growth for Q1 revised up to a 1.4% annualized pace, the slowest rise since spring 2022, and a sharp slowdown from the previous quarter’s 3.4%. Durable Goods Orders in May increased by 0.1%, against expectations of a 0.1% decline, though down from April’s revised 0.6% growth.

Initial Jobless Claims fell to 233,000 in late June, but the four-week average rose to 236,000, the highest since last September. Additionally, US Pending Home Sales unexpectedly dropped by 2.1% in May, marking the lowest level since 2001, indicating a cooling housing market.

Silver’s Resilience and Market Outlook

Despite the recent strength of the US dollar, silver has gained momentum, buoyed by expectations of a potential Federal Reserve rate cut following softer US economic data. Traders are cautious, holding back on strong market moves and awaiting further clarity on the Federal Reserve’s policy stance.

The upcoming release of the US Personal Consumption Expenditures (PCE) Price Index is expected to provide further insights into the Fed’s decision-making process.