Silver (XAG) Forecast: Downward Pressure and Key Support Levels
Silver Market Overview
Silver prices (XAG) have experienced declines for the second consecutive session, showcasing further downward momentum. Currently, XAG/USD is trading at $31.39, marking a drop of $0.29 or -0.92%.
Key Levels to Watch
The primary support level for silver remains at $30.88. A breach below could shift the market's trend towards bearish territory. Traders should remain vigilant, as a decline could lead to testing the 50-day moving average at $29.57.
- Increasing selling pressure could confirm this negative trend.
- Gold prices, influenced by a weak U.S. dollar and falling Treasury yields, have not translated similarly to silver.
Market Drivers
Factors affecting the silver market include:
- Decline in U.S. Treasury yields, which typically support precious metals.
- Federal Reserve policy expectations.
- Geopolitical tensions affecting safe-haven demand.
Impact of Federal Reserve Policies
The Federal Reserve's stance on monetary policy remains crucial. Current expectations point to a cautious approach toward future rate cuts, which could pressure silver further.
Geopolitical and Physical Demand Factors
Geopolitical uncertainty, particularly in the Middle East, has heightened demand for gold, but silver is facing physical demand weakness, particularly in China. With local prices trading at a discount, overall demand has been muted.
Future Outlook for Silver
Should silver drop below $30.88, the market might see increased downside risks. Continuous monitoring of Fed updates and geopolitical developments will be essential for traders.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.