The price of silver (XAG/USD) has been stagnant around $28.00 in Wednesday’s New York session as hopes for a significant interest-rate cut by the Federal Reserve (Fed) in September have dwindled. This comes after the release of the United States (US) Consumer Price Index (CPI) report for July, which showed a slight deceleration in both headline and core inflation rates.
Market sentiment regarding a 50 basis points (bps) rate cut has dropped to 41.5% from 54% for September, according to the CME FedWatch tool. However, the data still indicates that the Fed is likely to lower interest rates next month.
The CPI report revealed that annual headline and core inflation rates dipped by one-tenth to 2.9% and 3.2%, respectively, aligning with market expectations. The US Dollar (USD) has also weakened following the release of the inflation data, with the US Dollar Index (DXY) hitting a fresh weekly low at 103.30.
Looking ahead, the upcoming US monthly Retail Sales data for July, set to be released on Thursday, will serve as the next catalyst for the silver price movement.
Silver Technical Forecast
The silver price remains below the 20-day Exponential Moving Average (EMA) near $28.20, indicating a bearish trend in the near term. Support for silver bulls can be found at the 200-day EMA around $26.90, with additional horizontal support at $26.14.
The 14-day Relative Strength Index (RSI) is hovering near 40.00, and a decisive break below this level could signal a further bearish momentum.
Silver Daily Chart
Silver FAQs
Silver is a precious metal that is widely traded among investors for its store of value and medium of exchange characteristics. It can be used to diversify investment portfolios, hedge against inflation, and traded through various financial instruments like Exchange Traded Funds.
Factors influencing silver prices include geopolitical instability, economic conditions, interest rates, US Dollar performance, industrial demand, and recycling rates. Silver is also heavily used in industries like electronics and solar energy, impacting its price movement.
Silver prices often follow gold price trends, with the Gold/Silver ratio providing insights into their relative valuations. Understanding these dynamics can help investors make informed decisions about silver investments.
Overall, the current market conditions suggest a cautious outlook for silver prices, with potential volatility ahead based on upcoming economic data releases and global events.