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Silver (XAG) Daily Forecast: Nears $30.50, Downward Trendline May Drive Sell-off

By:
Arslan Ali
Published: Jun 21, 2024, 07:23 GMT+00:00

Key Points:

  • Silver reached an intraday high of $30.85, driven by a weaker US dollar.
  • Disappointing US economic data boosted silver prices, reinforcing expectations of Federal Reserve easing.
  • Market concerns about the US economy supported higher silver prices amid risk-off sentiment.
Silver (XAG) Daily Forecast: Nears $30.50, Downward Trendline May Drive Sell-off

In this article:

Silver (XAG/USD) maintained its upward trend, staying near $30.50 and reaching an intraday high of $30.85. This rise is attributed to a weaker US dollar following disappointing economic data, reinforcing expectations of a Federal Reserve easing program.

Additionally, risk-off market sentiment due to concerns about the US economy supported higher silver prices.

US Economic Data and Fed Policy

The broad-based US dollar has been losing traction under pressure from recent economic data. The Department of Labor reported that new unemployment benefit applications dropped to 238,000 for the week ending June 15, slightly exceeding the expected 235,000.

Additionally, Housing Starts for May declined by 5.2% to an annual rate of 982,000 units, while Building Permits fell by 2.9% to 949,000 units.

The Philadelphia Fed Manufacturing Index fell to 1.3 in June from 4.5 in May, though it remained positive for the fifth consecutive month.

Fed Policy and Market Sentiment

Market expectations now include a potential interest rate cut at the Federal Reserve’s December meeting, despite the initial hawkish stance. Minneapolis Fed President Neel Kashkari indicated it could take one to two years to bring inflation back to the 2% target.

Richmond Fed President Tom Barkin emphasized the Fed’s readiness to use its tools to manage economic challenges and the importance of adapting policies based on new information.

Therefore, the weakening US dollar and potential Fed rate cuts amid mixed economic data could support silver prices by lowering the dollar’s value and signalling economic uncertainty, bolstering safe-haven demand for precious metals.

Short-term Forecast

Silver (XAG/USD) is likely to remain bullish, supported by a weaker US dollar and economic uncertainty. Prices may hover around $30.85, with potential upward momentum if economic conditions persist.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver - Chart
Silver – Chart

Silver (XAG/USD) is trading at $30.49, down 0.81%. The pivot point is at $30.86. Immediate resistance levels are at $31.17, $31.52, and $31.78. Support levels are at $30.45, $30.02, and $29.67.

A downward trendline is extending resistance near the $30.85 level, reinforcing bearish momentum.

Technical indicators show the 50-day EMA at $29.84 and the 200-day EMA at $29.53. Maintaining below $30.85 supports the bearish outlook; a break above this level could shift momentum to a bullish bias.

About the Author

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.

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