Silver Price Forecast: XAG/USD extends losses to near $31.00 due to market caution

Source Fxstreet
  • Silver price continues to lose ground as traders exercise caution ahead of US Core PCE.
  • US Treasury yields appreciate due to the hawkish Fed, which weakens the demand for non-yielding Silver.
  • The higher US Dollar impacts the grey metal demand as it becomes more expensive for foreign buyers.

Silver price continues to lose ground for the third consecutive day, trading around $31.10 per troy ounce during the European session on Friday. The hawkish remarks from Federal Reserve (Fed) officials have raised concerns about potential rate hikes. Higher interest rates are negatively impacting non-yielding assets like Silver.

On Thursday, Dallas Fed President Lorie Logan expressed continued concerns about upside risks to inflation despite recent easing. Logan warned that the Federal Reserve needs to remain flexible and keep "all options on the table" as it monitors data and determines how to respond, according to Reuters. Additionally, Bloomberg reported on Wednesday that Atlanta Fed President Raphael Bostic stated the path to 2% inflation is not guaranteed and highlighted the significant breadth of price gains.

Additionally, the stronger US Dollar (USD) makes the grey metal more expensive for foreign buyers. This increased cost leads to lower Silver demand and subsequently lower prices. US Dollar Index (DXY), which measures the value of the US Dollar (DXY) against six other major currencies, trades higher around 104.80 with 2-year and 10-year yields on US Treasury bonds standing at 4.94% and 4.56%, respectively, by the press time.

On Thursday, the US Gross Domestic Product (GDP) Annualized for the first quarter was revised lower to 1.3% from 1.6%. Additionally, US weekly Initial Jobless Claims for the week ending on May 2 rose to 219,000 from the previous week's 216,000, slightly exceeding the market consensus of 218,000. Investors are awaiting the Federal Reserve's preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, which will be released on Friday. If the data continues to soften, it could reignite the debate over potential rate cuts in September, which could help Silver limit its downside.

XAG/USD

Overview
Today last price 31.08
Today Daily Change -0.09
Today Daily Change % -0.29
Today daily open 31.17
 
Trends
Daily SMA20 29.74
Daily SMA50 28.02
Daily SMA100 25.62
Daily SMA200 24.46
 
Levels
Previous Daily High 32.1
Previous Daily Low 31.01
Previous Weekly High 32.51
Previous Weekly Low 30.05
Previous Monthly High 29.8
Previous Monthly Low 24.75
Daily Fibonacci 38.2% 31.43
Daily Fibonacci 61.8% 31.68
Daily Pivot Point S1 30.75
Daily Pivot Point S2 30.34
Daily Pivot Point S3 29.66
Daily Pivot Point R1 31.84
Daily Pivot Point R2 32.51
Daily Pivot Point R3 32.93

 

 

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