Silver (XAG) Daily Insights: Anticipated Fed Rate Cut and Market Dynamics

Silver (XAG/USD) continued its upward trajectory on Tuesday, trading around $30.85, driven by several key factors. The weakening US Dollar heightened geopolitical tensions, and rising industrial demand for silver, particularly in the solar and medical sectors, has fueled its recent rally. Additionally, bullish predictions from well-known analysts have further boosted investor confidence in the precious metal.

US Dollar Decline Supports Silver Ahead of Fed Rate Cut

The US Dollar remains under pressure, with markets anticipating a major interest rate cut by the Federal Reserve. According to the CME Group’s FedWatch Tool, there’s now over a 60% chance that the Fed will cut rates by 50 basis points on Wednesday. Despite better-than-expected US manufacturing data, the dollar continues to weaken, making silver more attractive to investors as a hedge against currency depreciation. This anticipated rate cut, coupled with uncertainty surrounding China’s economy, is further supporting silver prices.

China Silver Group’s Performance and Implications for Silver

Shares of China Silver Group Limited (HKG:815) have jumped 15% in the past week, signalling potential short-term gains. However, the company’s long-term outlook is more concerning, with its stock down 74% over the last five years. While recent profitability is encouraging, the company’s weak balance sheet and five-year annualized return of -12% remain red flags. Investors should remain cautious despite the recent rebound, as long-term warning signs persist.

Kiyosaki vs. Schiff: Bitcoin vs. Precious Metals

Investor Robert Kiyosaki predicts significant gains for silver, gold, and Bitcoin (BTC) if the Fed cuts rates. He believes such a move will drive investors away from fiat currencies and bonds towards “real assets” like silver and gold. In contrast, Peter Schiff remains skeptical of Bitcoin’s potential, favoring silver’s recent strength. Schiff argues that economic factors such as inflation and interest rates will continue to support precious metals over cryptocurrencies. This divergence in opinions underscores the growing appeal of silver as both an industrial metal and a safe-haven asset.

Short-Term Forecast

Silver (XAG/USD) remains bullish, trading near $30.85 with key support at $30.50. A break above $31.10 could trigger further gains, while a drop below may signal downside risks.

Silver (XAG/USD) Price Forecast: Technical Outlook

Silver (XAG/USD) is trading at $30.84, up 0.05%, showing a slight upward move while holding above its pivot point at $30.67. The price action remains bullish, as long as it stays above the key support at $30.39. Immediate resistance is just ahead at $31.10, followed by $31.42 and $31.74, where buyers may face stronger opposition. The 50-day EMA at $29.57 provides solid support, reinforcing the bullish trend. However, a break below $30.50 could trigger a sharper downside move toward $29.95 or even $29.60. Silver looks bullish above $30.50, but caution is warranted if prices fall below this level. Watch for a potential upside move if resistance at $31.10 is broken convincingly.