By NewsBlogger The silver price surged due to US producer prices indicating factory inflation deceleration, with XAG/USD trading at $28.45 and expected to extend its rally, although momentum oscillators suggest it is currently overbought.
At a glance
- Silver price surged on Thursday with XAG/USD trading at $28.45
- Silver rally expected to extend after reaching a high of $28.28
- Next resistance levels for silver at $28.74 and $29.00
- Silver price on track for positive weekly close due to geopolitical tensions
- Factors affecting silver prices include rising industrial demand and ongoing geopolitical tensions
The details
The silver price surged on Thursday as US producer prices indicated factory inflation deceleration, with XAG/USD trading at $28.45 with minimal gains of 0.09%.
The silver rally is expected to extend after reaching a high of $28.28 on June 10, 2021. However, momentum oscillators suggest that silver is currently overbought, with the Relative Strength Index (RSI) at 77.41, still below the 80 levels sought by traders.
The next resistance levels for silver would be at $28.74 and $29.00. In the event that prices fall below the June 10 high, support levels are at $28.00, $27.54, and $27.00.
Silver price (XAG/USD) Outlook
Silver price (XAG/USD) is on track for a positive weekly close for the third consecutive week, strengthening due to geopolitical tensions and China’s weak economic outlook.
Iran has promised retaliation against Israel’s airstrike on their embassy near Damascus.
US Treasury yields have declined, reducing the opportunity cost of investment in non-yielding assets, while the US Dollar Index (DXY) is close to recapturing a five-month high at 106.00. The US Dollar has strengthened due to higher consumer price inflation and strong Nonfarm Payrolls data.
Traders are unwinding bets leaning towards the Federal Reserve reducing interest rates in June and July, with investors now expecting the Fed to pivot to rate cuts from September.
The Fed is expected to reduce interest rates only twice by the year-end instead of the initially projected three times.
Long-Term Outlook for Silver
The silver price is approaching an 11-month high near $30 on a weekly timeframe, with the long-term outlook for silver being bullish as the 20-week EMA is sloping higher.
The 14-period RSI rising to 73.00 indicates strong buying momentum, with more upside favored and no divergence signals present.
Currently, the silver price (XAG/USD) trades around $27.85 after reaching a three-year high of $28.53. Speculation that the Federal Reserve (Fed) will cut interest rates in June has caused silver prices to drop, as investors await the US March Producer Price Index (PPI) for new direction.
Traders reduced bets on Fed interest rate cuts after US inflation was higher than expected, with US President Joe Biden acknowledging the need to address rising prices.
The US Consumer Price Index (CPI) report in March showed that inflation remains unpredictable.
The Fed is likely to maintain a higher-for-longer rate narrative, with the Fed Funds Futures market shifting expectations for the first rate cut from June to September.
Factors Affecting Silver Prices
Rising industrial demand and silver’s appeal as an inflation hedge could support silver prices, while ongoing geopolitical tensions in the Middle East, such as Israel and Hamas rejecting ceasefire talks and Iran vowing retaliation for an airstrike on its embassy in Syria, may also boost silver prices.
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| fxstreet.com |
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| – Silver price surged on Thursday after US producer prices showed factory inflation decelerating – XAG/USD trades at $28.45 with minimal gains of 0.09% – Silver rally set to extend after reaching a high of $28.28 on June 10, 2021 – Momentum oscillators suggest silver is overbought – Relative Strength Index (RSI) at 77.41, still below 80 levels sought by traders – Next resistance for silver would be at $28.74 and $29.00 – If prices fall below June 10 high, support levels are at $28.00, $27.54, and $27.00 |
| fxstreet.com |
|---|
| – Silver price (XAG/USD) is on track for a positive weekly close for the third consecutive week – Precious metal strengthens due to geopolitical tensions and China’s weak economic outlook – Iran promises retaliation against Israel’s air strike on their embassy near Damascus – US Treasury yields decline, reducing the opportunity cost of investment in non-yielding assets – US Dollar Index (DXY) is close to recapturing a five-month high at 106.00 – US Dollar strengthens due to higher consumer price inflation and strong Nonfarm Payrolls data – Traders unwind bets leaning towards the Federal Reserve reducing interest rates in June and July – Investors now expect the Fed to pivot to rate cuts from September – Fed expected to reduce interest rates only twice by the year-end instead of three times projected – Silver price approaches an 11-month high near $30 on a weekly timeframe – Long-term outlook for silver is bullish with the 20-week EMA sloping higher – 14-period RSI rises to 73.00, indicating strong buying momentum – More upside is favored with no divergence signals present |
| fxstreet.com |
|---|
| – Silver price (XAG/USD) trades around $27.85 after reaching a three-year high of $28.53 – Speculation that the Federal Reserve (Fed) will cut interest rates in June has caused silver prices to drop – Investors are waiting for the US March Producer Price Index (PPI) for new direction – Traders reduced bets on Fed interest rate cuts after US inflation was higher than expected – US President Joe Biden acknowledged the need to address rising prices – US Consumer Price Index (CPI) report in March showed inflation remains unpredictable – Fed is likely to maintain a higher-for-longer rate narrative – Fed Funds Futures market shifted expectations for the first rate cut from June to September – Rising industrial demand and silver’s appeal as an inflation hedge could support silver prices – Ongoing geopolitical tensions in the Middle East may also boost silver prices – Israel and Hamas rejected ceasefire talks – Iran vowed retaliation for an airstrike on its embassy in Syria |
