Silver (XAG) Daily Forecast: Ascending Channel to Support XAG at $28; Buy Now?

By:

Arslan Ali

Published: Apr 17, 2024, 07:59 GMT+00:00

Live PriceSilver

$64.5000

+1.64%

Key Points:

Despite the strong US dollar, silver prices remain robust, trading near $28.35 amidst geopolitical unrest and market volatility.
Silver's allure as a safe haven strengthens due to escalating tensions in the Middle East and cautious Fed interest rate policies.
Silver maintains its upward trajectory, supported by a positive technical outlook with a current price above the $28.03 pivot point.

Silver (XAG) Daily Forecast: Ascending Channel to Support XAG at $28; Buy Now?

In this article:

Silver
+1.64%
Silver Forecast

Market Overview

The US dollar is holding near early November highs, yet silver continues to perform well, trading around the $28.35 level. This trend is driven by investors seeking safe-haven assets amid ongoing geopolitical tensions and market uncertainty.

Additionally, uncertainty about the Federal Reserve’s interest rate decisions continues to boost silver’s appeal. Mixed US economic data and Fed Chair Jerome Powell’s hawkish comments have prompted investors to add precious metals like silver to their portfolios, supporting its price increase.

Middle East Tensions and Israel’s Impact on Silver Price

Geopolitical unrest in the Middle East, particularly Israel’s military operations in Gaza, has directly influenced silver prices (XAG/USD). Recent airstrikes, including the destruction of structures in the Jabalia refugee camp, have intensified regional tensions and contributed to silver’s price rise.

Additionally, Iran’s warnings to Israel and calls for international sanctions against Israeli military programs have increased market uncertainty, prompting investors to seek safe-haven assets like silver. The escalating tensions and the potential for broader conflict have boosted demand for silver as a perceived stable store of value.

The ongoing violence and significant humanitarian impact have also driven global concern, leading investors to diversify into perceived safer assets, including silver.

Impact of Bullish US Dollar and Economic Factors on Silver Price

Despite a strong US dollar, silver has maintained upward momentum, initially facing selling pressure but subsequently stabilizing. The dollar’s strength, supported by positive US economic indicators such as robust retail sales and steady industrial production, has kept the currency near recent highs. These gains are further bolstered by comments from Fed Chair Powell, suggesting ongoing high rates due to persistent inflation, which in turn supports dollar demand amid Middle Eastern geopolitical tensions.

Typically, a strong dollar would depress commodity prices, yet silver’s role as a safe haven and strategic asset allocation by investors have mitigated this effect, sustaining its price increase.

Silver (XAG/USD) Price Forecast

Silver Price Chart

On April 17, Silver prices demonstrated resilience, climbing 0.39% to trading at $28.27. The metal continues to hold above its pivot point at $28.03, suggesting sustained buying interest. The price is currently buoyed by an upward trend channel and supported by the 50-day Exponential Moving Average (EMA) at $27.91, both indicating potential for further gains.

Immediate resistance levels are at $29.57, followed by $30.51 and $31.48. Surpassing these could accelerate the upward momentum. Conversely, if silver drops below its current support level, it could face downward pressure with next support levels at $27.32, $26.28, and $25.37. A break below the pivot could trigger a sharp selling trend.

Overall, the market posture for silver remains positive as long as it trades above the $28.03 mark.

About the Author

Arslan AliTechnical Analysis Expert

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.