Silver (XAG) Daily Forecast: Trading Near ZAR 558.04; Upward Trendline Supports Buy
By: Arslan Ali
Published: Jul 11, 2024, 06:30 GMT+00:00
Key Points:
In this article:
Silver +1.99%
Silver prices rose further, trading near ZAR 558.04 after hitting an intraday high of ZAR 566.18. This bullish trend is driven by several key factors. Investors seeking safe-haven assets amid global economic uncertainties have turned to silver. Additionally, industrial demand, particularly from the technology sector for electronics and solar panels, has contributed to the metal’s performance. Moreover, escalating conflict in the Middle East is boosting safe-haven demand for silver.
Impact of Growing Expectations of Fed Rate Cuts and a Weakening US Dollar
Anticipation of Federal Reserve rate cuts, potentially starting in September, has weakened the US dollar, making non-yielding assets like silver more attractive to investors. According to the CME FedWatch Tool, investors are now pricing in a 71% chance of a rate cut in September, up from 70% on Tuesday. As the US Dollar Index (DXY) trends lower, silver prices have benefited from the weakened greenback’s inverse relationship with commodity prices. This expectation of monetary policy easing has fueled optimism among silver traders, who anticipate sustained demand amidst a softer dollar environment.
Looking ahead, the US Consumer Price Index (CPI) is expected to dip slightly from 3.3% to 3.1% annually in June, while core inflation is projected to remain steady at 3.4% year-over-year. Initial Jobless Claims for the week ending July 6 are anticipated to increase marginally from 238,000 to 240,000. Additionally, July’s Consumer Sentiment is forecasted to improve to 68.5, up from June’s 68.2, reflecting cautious optimism among consumers. The expectation of Federal Reserve rate cuts has weakened the US dollar, boosting silver prices due to increased investor interest in non-yielding assets.
Geopolitical Tensions in Gaza and Safe-Haven Demand
On the geopolitical front, the recent escalations in geopolitical tensions, notably in Gaza, have heightened global uncertainty and bolstered safe-haven demand for silver. Amid ongoing conflict, investors seek refuge in assets perceived as stable stores of value, including silver and gold. The geopolitical risks stemming from the Middle East boost silver’s appeal as a safe-haven asset, reflecting broader market anxieties and uncertainties. As ceasefire negotiations falter and tensions persist, silver prices have responded positively to increased demand driven by geopolitical instability.
Short-term Forecast
Silver is trading near ZAR 558.04 after reaching an intraday high of ZAR 566.18. The bullish trend is driven by investor demand for safe-haven assets amid global economic uncertainties and Middle East tensions.
Silver (XAG/ZAR) Price Forecast: Technical Outlook
Silver – Chart
Silver (XAG/ZAR) is trading at ZAR 558.04, up 0.63% in the latest session. The two-hour chart highlights key levels, with the pivot point at ZAR 547.65. Immediate resistance is at ZAR 566.18, followed by ZAR 575.48 and ZAR 583.85. On the downside, immediate support is at ZAR 540.91, with further support at ZAR 535.98 and ZAR 529.87. Technical indicators show a bullish trend, with the 50-day EMA at ZAR 547.65 and the 200-day EMA at ZAR 540.15. The upward trendline supports the buying trend. However, a break below ZAR 547.65 could trigger a sharp selling trend.
