Silver price (XAG/USD) has found a strong support level near $28.70 amidst a decline in US bond yields. Speculation is rife that the Federal Reserve (Fed) will begin cutting interest rates starting from the September meeting, driving investors towards safe-haven assets like Silver.
With 10-year US Treasury yields dropping to around 4.24%, the appeal of interest-bearing assets diminishes, making non-yielding assets like Silver more attractive.
Furthermore, the US Dollar (USD) is gaining strength due to uncertainties surrounding the upcoming presidential elections in November. The nomination of Vice President Kamala Harris as the Democratic contender against President Trump has added to the market’s apprehensions.
If Trump secures victory, higher inflation is expected as he plans to reduce corporate taxes and interest rates, potentially widening the fiscal budget deficit. His history of supporting restrictive trade policies adds to the economic uncertainty.
In India, Silver prices plummeted as the government proposed a reduction in custom duty on precious metal imports, signaling a shift in market dynamics.
Looking ahead, investors are closely monitoring the US Q2 GDP and June’s core PCE inflation data, set to be released later this week, for further market insights.
Technical Analysis of Silver Price
Silver price has been range-bound between $28.50 and $32.50 for the past two months. The recent drop below the 20-day Exponential Moving Average (EMA) at $30.00 indicates uncertainty in the short term.
The 14-day Relative Strength Index (RSI) hovering between 40.00 and 60.00 reflects indecision among traders.
Silver Daily Chart
Silver FAQs: Everything You Need to Know
Silver is a precious metal with a long history of being used as a store of value and a medium of exchange. Traders often turn to Silver for portfolio diversification, intrinsic value, or as a hedge during inflationary periods. The metal can be bought in physical form or traded through Exchange Traded Funds (ETFs) to track its price on global markets.
Factors influencing Silver prices range from geopolitical instability and recession fears to interest rates and USD performance. Demand from industries like electronics and solar energy, along with economic dynamics in major countries, play a crucial role in price movements.
Silver prices typically follow Gold’s trends, with the Gold/Silver ratio serving as a key indicator for relative valuation. Understanding these factors can help investors make informed decisions in the Silver market.