Silver Price Forecast: Slightly Lower as Investors React to Cautious Fed Minutes

Highlights

• Silver prices edge lower as investors analyze Fed minutes.
• Fed maintains steady rates, reflecting slower tightening pace.
• Investors anticipate rate increase, closely monitor economic data and geopolitical developments.

Overview

Comex Silver prices are edging lower on Thursday as investors analyzed the minutes from the Federal Reserve’s latest meeting and prepared for upcoming economic data that could influence the central bank’s policy trajectory.

The minutes revealed that the Fed maintained interest rates steady in June to allow more time for assessment of further rate hikes. Although a majority of Fed members foresee additional rate hikes in the future, there was a reflection of a slower pace of tightening.

Investors still anticipate a rate increase at the Fed’s upcoming meeting later this month, with the 10-year U.S. Treasury yield rising as markets reopened after the Independence Day holiday.

The minutes also highlighted the central bank’s intention to moderately firm policies in response to the effects of cumulative tightening. Furthermore, policymakers have consistently emphasized the need for additional rate hikes to address inflation and manage the economy.

Given silver’s sensitivity to rising U.S. interest rates due to increased opportunity costs, market participants closely monitored the developments. Attention has now shifted towards the U.S. Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), ADP jobless claims, and the non-farm payrolls report to gain further insights into the labor market.

Traders also kept a watchful eye on China’s export controls on semiconductor metals amid escalating tensions with the United States, as well as the upcoming Beijing visit by U.S. Treasury Secretary Janet Yellen. These factors contributed to the overall sentiment in the market and influenced silver prices.

Short-Term Outlook:  More Rate Hikes Likely

In summary, Comex Silver prices dipped as investors processed the Fed minutes and prepared for key economic data. The minutes reflected a cautious approach by the central bank and the likelihood of future rate hikes. With the upcoming release of labor market data and ongoing geopolitical developments, market participants continue to assess the impact on silver prices.

Technical Analysis

Comex Silver is indicating modestly bullish sentiment as the current price of 23.410 is slightly higher than the previous close. The 200-4H moving average at 23.434 indicates a neutral signal, while the 50-4H moving average at 22.993 suggests a bullish signal. The 14-4H RSI reading of 63.25 reflects a positive market sentiment.

The main support area is at 22.185, and the main resistance area ranges from 24.225 to 24.475, placing the market in a neutral stance. Overall, the Comex Silver market exhibits a slightly bullish sentiment, with the price above the shorter-term moving average and in a position to possibly overtake the 200-4H moving average.