SLV

Silver (XAG) Daily Forecast: Bullish Trend to Continue Above $30?

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Market Overview

Silver (XAG/USD) managed to halt its early-day losses and regain traction around $30.4955, reaching an intraday high of $30.50. This occurred despite robust U.S. economic data suggesting prolonged higher interest rates and a strong U.S. dollar.

The upward movement in silver prices is linked to increasing geopolitical tensions in the Middle East, boosting safe-haven assets like silver.

Investors will closely monitor upcoming speeches from Federal Reserve officials, including Waller on Friday. Hawkish remarks from the Fed could push silver prices down. Additionally, upcoming economic data such as U.S. Durable Goods Orders and the Michigan Consumer Sentiment Index will influence market sentiment.

Geopolitical Unrest in the Middle East Fuels Silver Prices Amid Humanitarian Crisis in Palestine

Rising tensions in the Middle East are likely to support silver prices. Over 900,000 Palestinians have been displaced in the past two weeks, facing severe shortages of shelter, food, water, and medicine.

Hospitals are struggling without fuel for generators, endangering patients’ lives. Israeli forces are advancing in Gaza, besieging critical health facilities. The toll is devastating, with over 35,800 killed and 80,011 wounded in Gaza.

The escalating humanitarian crisis in Gaza heightens geopolitical uncertainty, which boosts demand for silver as a safe-haven asset and supports its price.

Strong US Economic Data and Potential Interest Rate Changes on Gold and Silver Prices

Strong US economic data has bolstered the US dollar, signaling the potential for higher interest rates and dampening Gold and Silver prices. Atlanta Fed President Raphael Bostic expressed concerns about inflation, suggesting that the Federal Reserve might delay rate cuts to prevent the economy from overheating.

According to the CME FedWatch Tool, the likelihood of the Fed maintaining current rates in September increased from 41.9% to 48.4% on May 23rd, indicating a market shift towards expecting no rate cuts.

On the data front, US Initial Jobless Claims fell by 8,000 to 215,000 for the week ending May 18, better than the expected 220,000 and the previous week’s 223,000. Additionally, the flash US S&P Global Manufacturing PMI rose to 50.9 in May from 50.0 in April, while the Services PMI increased to 54.8 from 51.3, both surpassing expectations.

The US S&P Global Composite PMI surged to 54.4 in May from 51.3 in April, exceeding the market forecast of 51.1 and marking its highest level since April 2022. As a result, the robust US economic data, potential for higher interest rates, and reduced probability of rate cuts have put downward pressure on Gold and Silver prices.

Short-Term Forecast

Silver (XAG/USD) is likely to see support at $30.05, with potential resistance at $30.97. Geopolitical tensions and Fed speeches could drive short-term price movements, suggesting a cautious bullish outlook.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver – Chart

Silver is trading at $30.39, reflecting a 0.88% increase. The 4-hour chart shows a pivot point at $30.05, which is crucial for determining the trend direction. Immediate resistance levels are $30.97, $31.60, and $32.39. On the downside, support levels are $29.44, $28.79, and $28.10.

The 50-day Exponential Moving Average (EMA) is $30.76, and the 200-day EMA is $29.42. The current price being above the 200 EMA suggests a bullish trend, with the upward trendline supporting the potential for further gains, especially above $30.05.

In conclusion, as long as silver remains above the pivot point of $30.05, the outlook is bullish. However, a break below this level could trigger a sharp selling trend.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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