Silver Price Forecast: XAG/USD finds support near $30.20 as investors digest hawkish FOMC minutes

Source Fxstreet
May 23, 2024 13:07
  • Silver price finds cushion near $30.20 as investors had already priced in hawkish interest rate guidance in FOMC minutes.
  • US weekly jobless claims were lower at 215K from the estimates of 220K in the week ending May 17.
  • The US Dollar and bond yields remain under pressure on firm Fed rate-cut prospects.

Silver price (XAU/USD) stabilizes near $30.20 after a vertical downfall in Thursday’s New York session. The sharp downside in the white metal was driven by hawkish Federal Open market Committee (FOMC) minutes of the May policy meeting, which indicated that officials also discussed over hiking interest rates again as progress in the disinflation process stalled in the first quarter of the year.

However, the impact of the hawkish FOMC communication is supposed to be temporary on bullions as views of policymakers were based on stubborn higher inflation data of the first quarter of this year. The consumer price inflation data for April was declined as expected and indicated that price pressures are on course to return to the desired rate of 2%.

10-year US Treasury yields drop to 4.42% as soft inflation data is an unfavorable scenario for interest rates remaining higher for a longer period. A decline in yields on interest-bearing assets diminishes the opportunity cost of holding an investment in non-yielding assets such as Silver.

The US Dollar Index (DXY) is down by 0.2%, trades near 104.70 as investors remain firm that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.

The USD Index struggles to stabilize despite the United States (US) Department of Labor has posted lower Initial Jobless Claims than estimates for the week ending May 17. Number of individuals claiming jobless benefits for the first time were lower at 215K from the estimates of 220K.

Silver technical analysis

Silver price trades in a Rising Channel chart pattern formed on a daily timeframe in which each pullback move is considered as a buying opportunity by the market participants. Upward-sloping 20 and 50-day Exponential Moving Averages (EMAs) suggest that the near-term trend is bullish.

The 14-period Relative Strength Index (RSI) oscillates in the bullish range of 60.00-80.00, indicating that momentum has leaned on the upside.

Silver daily chart

XAG/USD

Overview
Today last price 30.6
Today Daily Change -0.18
Today Daily Change % -0.58
Today daily open 30.78
 
Trends
Daily SMA20 28.43
Daily SMA50 27.28
Daily SMA100 25.13
Daily SMA200 24.21
 
Levels
Previous Daily High 32.2
Previous Daily Low 30.76
Previous Weekly High 31.6
Previous Weekly Low 27.97
Previous Monthly High 29.8
Previous Monthly Low 24.75
Daily Fibonacci 38.2% 31.31
Daily Fibonacci 61.8% 31.65
Daily Pivot Point S1 30.29
Daily Pivot Point S2 29.8
Daily Pivot Point S3 28.84
Daily Pivot Point R1 31.73
Daily Pivot Point R2 32.69
Daily Pivot Point R3 33.18

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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