Silver (XAG) Daily Forecast: Prices Near $29; More Sell-off Ahead?

By:

Published: Jun 11, 2024, 07:24 GMT+00:00

Key Points:

Silver prices fell to $29.03 due to strong US job data and Fed rate expectations.
Political uncertainty in Europe may limit further losses in silver prices.
Traders await US inflation data and the FOMC decision for market direction cues.

Silver (XAG) Daily Forecast: Prices Near $29; More Sell-off Ahead?

Market Overview

Silver price (XAG/USD) continued its bearish trend, remaining under pressure around $29.16 and hitting an intraday low of $29.03. The decline was driven by upbeat US Nonfarm Payrolls data released on Friday, which fueled speculation that the Federal Reserve will keep rates higher for longer. This strengthened the US dollar and contributed to the decline in silver.

However, ongoing political uncertainty in Europe and geopolitical risks could help limit further losses in silver prices.

Traders are cautious about making strong positions ahead of the release of the latest US consumer inflation figures and the FOMC decision on Wednesday, which will provide cues about when the Fed might begin cutting rates.

Impact of Strengthened US Dollar and Rate Cut Expectations on Silver Prices

The broad-based US dollar has strengthened following upbeat jobs data, reducing expectations of an imminent Federal Reserve interest rate cut in September. This has kept US Treasury bond yields high, supporting the dollar and dampening demand for silver.

Speculation that the Fed will maintain higher rates for longer has decreased the probability of a September rate cut to around 50%, with markets now anticipating only one 25 basis point cut later in the year.

As a result, the strengthened dollar and reduced likelihood of a rate cut have pressured silver prices, diminishing its appeal to investors. Traders remain cautious amid uncertainty about the Fed’s future policy decisions.

Short-Term Forecast

Silver prices are expected to remain bearish, with key resistance at $29.27. Immediate market reactions will depend on upcoming US inflation data and the FOMC decision.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

Silver is currently trading at $29.16, reflecting a 1.25% increase. The 4-hour chart identifies a pivot point at $29.27, which is crucial for determining market direction. Immediate resistance levels are noted at $29.78, $30.14, and $30.58.

On the downside, support levels are observed at $28.75, $28.37, and $27.99. The 50-day Exponential Moving Average (EMA) stands at $29.95, while the 200-day EMA is at $30.19, indicating significant resistance ahead.

A bearish engulfing candle on the 2-hour timeframe suggests the potential for a continued downtrend in silver. Silver remains bearish below $29.27, and a break above this level could shift the bias to bullish.

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.

Editors’ Picks