Silver (XAG) Daily Forecast: Falls to $28; Bounce Back or Further Sell-Off?

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Published: Jul 25, 2024, 07:24 GMT+00:00

Key Points:

Silver prices (XAG/USD) decline to $27.96, awaiting Federal Reserve policy signals.
Focus on key US economic data: Q2 GDP report and PCE Price Index.
Expectations of Fed rate cut in September weaken the US dollar, aiding silver prices.

Silver (XAG) Daily Forecast: Falls to $28; Bounce Back or Further Sell-Off?

Market Overview

Despite a weaker US dollar, silver prices (XAG/USD) continue to decline, trading around $27.96 after reaching an intra-day low of $27.74. Traders are cautious, awaiting clearer signals from the Federal Reserve on future policies.

Attention is focused on key US economic reports, including the Advance Q2 GDP report on Thursday and the Personal Consumption Expenditures (PCE) Price Index on Friday.

The increasing expectation of a potential Fed rate cut in September has weakened the US dollar, helping silver limit its losses.

Silver Prices Set to Stabilize Amid Global Risks and Anticipated Fed Rate Cuts

Silver prices fell on Thursday due to increased selling pressure. However, further declines may be limited due to rising global risks and expectations of Federal Reserve policy easing. Weak economic data from the Eurozone and slowing manufacturing growth have bolstered silver’s appeal as a safe-haven investment.

In the US, former New York Fed President William Dudley has suggested that the Federal Reserve may soon cut interest rates due to recession fears. Market expectations for a 25 basis point rate cut in September, with additional cuts possible in November and December, have grown stronger.

This potential policy shift could support silver prices. Traders are also eyeing key US economic data, including the Q2 GDP report and the Personal Consumption Expenditures (PCE) Price Index, which could influence silver and the broader market.

Overall, silver prices may stabilize after recent declines due to global risks and expected Federal Reserve rate cuts. Economic uncertainty and anticipated policy easing are likely to support and potentially boost silver prices.

Short-Term Forecast

Despite a weaker US dollar, silver prices (XAG/USD) continue to decline, trading around $27.96 after reaching an intra-day low of $27.74. Silver’s outlook remains bullish above the pivot point of $27.95.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

Silver (XAG/USD) is currently trading at $27.96, down 3.22%. The price has dropped below key moving averages, with the 50-day EMA at $29.56 and the 200-day EMA at $29.86, indicating a bearish momentum. Immediate support is found at $27.54, with further levels at $27.04 and $26.67, suggesting potential areas where buying interest might emerge.

On the upside, immediate resistance is identified at $28.57, followed by $28.96 and $29.46, indicating levels where selling pressure could reappear if the price attempts to rebound. The pivot point is set at $27.95, and a break below this level could drive a sharp selling trend.

Overall, the outlook remains bullish above the pivot point of $27.95, but if prices fall below this key level, it could trigger further declines, making it crucial for traders to monitor these support and resistance levels closely.

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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