Investors are split on the size of the Federal Reserve’s interest-rate cuts next month as fears of a global slowdown ease with positive economic indicators.
Silver price (XAG/USD) remains above the key support level of $27.00 in Friday’s trading session, signaling confidence in the metal’s value amidst expectations of policy normalization from the Fed. While there is uncertainty among investors regarding the magnitude of rate cuts, market data indicates a 56.5% chance of a 50 basis points reduction in September.
The recent decrease in concerns over a global economic downturn can be attributed to lower US jobless claims and China’s robust inflation figures for July. The US Dollar is showing weakness as expectations of Fed rate cuts solidify, leading to a correction in the US Dollar Index and a drop in 10-year US Treasury yields.
Although lower interest rates typically benefit the Silver price, current market conditions have raised concerns about the metal’s global demand across various industries.
Silver Technical Forecast
On the daily chart, Silver price is approaching a horizontal support level established from a high in December 2023. The asset is hovering near the 200-day Exponential Moving Average (EMA) around $26.90, indicating an uncertain trend.
The 14-day Relative Strength Index (RSI) is attempting to re-enter the 40.00-60.00 range, with a bearish momentum expected if the RSI (14) successfully crosses this threshold.
Silver Daily Chart
Silver FAQs
Silver is a precious metal often traded by investors for its intrinsic value and potential as a hedge during inflationary periods. It can be purchased physically or traded through Exchange Traded Funds to diversify investment portfolios. Price movements are influenced by factors such as geopolitical instability, economic conditions, and demand in industrial sectors like electronics and solar energy.
Overall, Silver prices tend to follow Gold’s trends, with both metals serving as safe-haven assets during times of uncertainty. Understanding the dynamics of Silver pricing can help investors make informed decisions about their portfolios and financial strategies.