Silver (XAG) Daily Forecast: Price Struggles Below $31.30; Sell Now?

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Published: Jul 17, 2024, 06:37 GMT+00:00

Key Points:

Silver (XAG/USD) is currently valued at $31.04, marking a 0.45% decrease.
Anticipation of a U.S. Federal Reserve rate cut in September keeps Treasury yields low.
Upcoming U.S. Industrial Production data is closely monitored for trading direction.

Silver (XAG) Daily Forecast: Price Struggles Below $31.30; Sell Now?

Market Overview

Silver (XAG/USD) is valued at $31.04, marking a 0.45% decrease. The metal’s price is experiencing a slight downturn, influenced by a robust risk-on mood in the global markets. This mood is fueling a rally across major equity indices and encouraging some investors to capitalize on recent gains.

Federal Reserve’s Monetary Policy Influence

Expectations of a forthcoming rate cut by the U.S. Federal Reserve in September are maintaining low U.S. Treasury yields, which fails to support a rebound in the U.S. dollar from a three-month low.

This sentiment continues to provide support for precious metals like silver, which do not offer yields, making them more attractive when yields on other investments are low.

Economic Indicators and Silver’s Near-Term Outlook

Investors are closely monitoring upcoming U.S. Industrial Production data, seeking further direction. The anticipation of a dovish shift by the Fed is largely priced into the market, keeping bond yields near multi-month lows and underpinning silver prices.

Therefore, any further decline in silver might still attract buyers, viewing dips as favorable opportunities.

Market Dynamics and Investor Sentiment

Recent statements from Fed officials have reinforced the likelihood of rate cuts, influencing investment flows towards traditionally non-yielding assets like silver.

Moreover, upbeat U.S. Retail Sales data has shown consumer resilience, suggesting robust economic activity which could temper aggressive bullish bets on silver.

Despite this, the prevailing economic sentiment and monetary policy landscape suggest that silver prices may continue to find substantial support, limiting significant downside risks.

Short-Term Forecast

Silver (XAG/USD) trades at $31.04, and a bearish trend persists below $31.31. Immediate support at $30.94, with resistance at $31.53. Monitor U.S. Industrial Production data for direction.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

On the 2-hour chart, Silver (XAG/USD) is trading at $31.04, reflecting a decline of 0.45%. The pivot point is positioned at $31.31. Immediate resistance levels are noted at $31.53, $31.76, and $31.99. Key support levels to watch are $30.94, $30.67, and $30.40.

Technical indicators highlight the 50-day Exponential Moving Average (EMA) at $30.94 and the 200-day EMA at $30.47. A bearish engulfing candle under the downward trendline is likely to limit upside movement. The recent spinning top candle under the $31.31 pivot signals weaker bullish momentum.

In conclusion, Silver remains bearish below $31.31. A break above this level could boost bullish sentiment, whereas staying below suggests continued downside risk.

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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