Silver (XAG) Daily Forecast: Dips to $27.15; Will Trendline Spur Buying?

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Published: Apr 24, 2024, 07:04 GMT+00:00

Key Points:

Silver's drop to $27.15 reflects waning safe-haven demand amid easing geopolitical tensions.
Persistent high interest rates by the Federal Reserve bolster the USD, pressuring silver prices.
Key pivot at $27.56 could determine silver's short-term direction amid volatile market conditions.

Silver (XAG) Daily Forecast: Dips to $27.15; Will Trendline Spur Buying?

Market Overview

Silver (XAG/USD) continued its decline, reaching an intra-day low of 27.15. This drop stems from diminished geopolitical tensions, which have lessened the appeal of safe-haven assets such as silver.

Additionally, expectations that the Federal Reserve will keep interest rates high for a longer duration have supported the US dollar, exacerbating the decrease in silver prices.

Easing Geopolitical Tensions and Safe-Haven Silver Price

The subdued performance of silver prices is largely due to reduced geopolitical tensions. Iran’s decision not to respond to Israel’s recent missile strike has diminished fears, leading to a decrease in silver prices.

As a result, investors are moving away from safe-haven assets like silver, favoring riskier investments, which places downward pressure on silver prices as market preferences shift.

Impact of Federal Reserve’s Interest Rate Policy on Silver Price

Another factor pressuring silver prices is the widespread belief that the Federal Reserve will keep interest rates elevated for an extended period. This expectation arises from the Fed’s focus on curbing inflation through tighter monetary policy.

When the Federal Reserve signals its intention to maintain high interest rates, investors adjust their investment strategies accordingly, influencing silver demand.

Higher interest rates enhance the attractiveness of yield-bearing investments over non-yielding assets like silver. Consequently, the prospect of sustained high-interest rates exerts downward pressure on silver prices.

Overall, silver prices are experiencing slight bearish pressure from a combination of eased geopolitical tensions and the anticipation of prolonged high interest rates by the Federal Reserve.

Silver (XAG/USD) Price Forecast

Silver – Chart

Today, Silver (XAG/USD) recorded a modest increase, up 0.16% to $27.34. The market is closely observing the pivot point at $27.56, which is pivotal for determining the metal’s short-term trajectory.

Silver is encountering immediate resistance at $28.79, with further barriers at $29.57 and $30.51 that could restrict upward movement. Conversely, support is established at $26.52, followed by stronger levels at $25.68 and $24.72, which could provide stabilization points during declines.

The 50-Day Exponential Moving Average (EMA) is positioned at $27.79, suggesting slight resistance above the current price. Meanwhile, the 200-Day EMA at $26.44 offers underlying support. These indicators imply a tentative balance in market sentiment. Silver’s market outlook is cautiously optimistic above the $27.56 mark.

About the Author

Arslan Aliauthor

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.

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