Last week, silver jumped by around 5.74%, rebounding from a recent low of $26.45. The early gains were driven by a weaker U.S. dollar and increasing speculation about a possible Federal Reserve rate cut in September.
The dollar weakened after inflation data came in lower than expected, raising hopes that the Fed might ease its monetary policy. This pushed silver to a two-week high of $28.50.
However, silver faced selling pressure near $28.50, slowing its rise. Despite a daily increase of 2.64%, silver ended the week just below $29.045. This caution reflects ongoing uncertainty about the Fed’s next steps and mixed economic signals.
Key Factors Affecting Silver
- Geopolitical Tensions: Silver's increase was partly due to rising geopolitical risks. The ongoing conflict in the middle east, along with Ukraine’s incursion into Russia, has driven demand for safe-haven assets like silver.
- Economic Data: The U.S. dollar's decline, caused by cooling inflation, has been a major factor in silver’s performance. If inflation continues to slow, the chances of the Federal Reserve cutting rates rise, which could weaken the dollar further and support silver prices.
Upcoming Events this Week
Silver is currently trading at $28.896, slightly below last week's peak of $29. The metal's upward trend is likely to continue, driven by investor expectations of potential Federal Reserve rate cuts in September.
Key Events to Watch:
- Fed Meeting Minutes: Investors will be looking for clues on future monetary policy.
- Economic Data: PMI reports from the Services and Manufacturing sectors, along with Unemployment Claims, will play a significant role in market sentiment.
- Jerome Powell's Speech: The Fed Chairman's address at the Jackson Hole Symposium will offer insights into economic conditions.
Geopolitical Impact:
- Middle East Tensions: Conflicts in Ukraine, Russia, Iran, and Israel may influence silver prices, contributing to market volatility.
Silver’s outlook remains positive as investors keep a close watch on these events and geopolitical factors.
Silver (XAG/USD) Price Chart - Source: TradingView
Silver (XAG/USD) Price Outlook
Silver is gaining but faces a key resistance at $29.09, where a triple-top pattern could limit further increases. If silver moves past this level, it may continue to rise. The next resistance points are $29.45, $29.83, and $30.10.
On the downside, watch for support at $28.72, $28.35, and $28.12. The 50-day Exponential Moving Average (EMA) and other indicators suggest that if silver surpasses $29.09, the upward trend is likely to continue.
Conclusion: Keep an eye on the $29.09 level. A move above it could lead to higher silver prices.