As the US Dollar rebounds and the Caixin Manufacturing PMI unexpectedly contracts, the Silver price (XAG/USD) faces a sharp sell-off near $29.16, dropping to around $28.70 in Thursday’s European session.
The surge in the US Dollar Index (DXY) to 104.35 after hitting a weekly low of 103.86 has made investing in Silver more expensive for traders. Additionally, the decline in the Caixin Manufacturing PMI to 49.8 from expectations of 51.5 has weighed on Silver prices due to concerns over demand from industries like renewable energy and electric vehicles.
Despite these challenges, speculation that the Federal Reserve (Fed) will cut interest rates in September is expected to limit the downside for Silver. The Fed’s decision to leave rates unchanged and acknowledge cooling inflation and labor market strength has raised expectations of rate cuts in the near future.
Investors are now awaiting the release of the US ISM Manufacturing PMI and Nonfarm Payrolls report for July, which could provide further insights into the market direction.
Technical Analysis
Silver price is currently testing a key resistance level near $28.66, with the asset trading above the 50-period EMA and the RSI above 60.00, indicating a potential shift in momentum to the upside.
Silver Four-Hour Chart
Silver FAQs
Silver is a precious metal widely traded among investors, offering diversification and potential hedging benefits. Factors influencing Silver prices include geopolitical instability, interest rates, US Dollar movement, investment demand, and industrial usage.
Overall, the current market conditions suggest a challenging environment for Silver prices due to the strengthening US Dollar and weaker-than-expected manufacturing data. However, the potential for rate cuts by the Fed could provide some support to Silver in the near term. Investors should closely monitor upcoming economic reports for further insights into market trends and potential trading opportunities.