Silver Price Forecast: XAG/USD holds key support of $29 as cooler US CPI boosts Fed rate-cut bets

Source Fxstreet
  • Silver price gains ground above $29.00 as soft US price pressures weigh on bond yields.
  • Traders price in two rate cuts this year against one signaled by the Fed.
  • Silver price trades in a Falling Channel formation.

Silver price (XAG/USD) clings to key support of $29.00 in Friday’s American session. The white metal rebounds as US bond yields come under pressure due to improved speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.

10-year US Treasury yields have dropped to near 4.20%. Lower yields on interest-bearish assets reduce the opportunity cost of holding an investment in non-yielding assets, such as Silver.

The CME FedWatch tool shows that the probability for rate cuts in September has improved to almost 71% from 50.4% recorded a week ago. Market expectations for Fed rate cuts have risen as the United States (US) consumer and produce inflation decline on monthly and an annual basis in May. Major contribution to decline in price pressures came from soft gasoline prices.

The CME FedWatch Tool also shows that there will be two rate cuts this year against one signalled by Fed policymakers in their latest dot plot. Fed officials lowered potential number of rate cuts in the forecast report from three forecasted in March as they were concerned over inflation remaining stubborn due to strong labor market conditions.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to 105.70.

Silver technical analysis

Silver price trades inside Thursday’s trading range. The white metal trades in a Falling Channel chart pattern in which each pullback is considered as selling opportunity by market participants. The asset has dropped below the 200-period Exponential Moving Average (EMA), which trades around $29.40, indicating the overall trend has turned bearish.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a consolidating ahead.

Silver four-hour chart

XAG/USD

Overview
Today last price 29.16
Today Daily Change 0.20
Today Daily Change % 0.69
Today daily open 28.96
 
Trends
Daily SMA20 30.62
Daily SMA50 28.93
Daily SMA100 26.34
Daily SMA200 24.75
 
Levels
Previous Daily High 29.73
Previous Daily Low 28.66
Previous Weekly High 31.55
Previous Weekly Low 29.12
Previous Monthly High 32.51
Previous Monthly Low 26.02
Daily Fibonacci 38.2% 29.07
Daily Fibonacci 61.8% 29.32
Daily Pivot Point S1 28.5
Daily Pivot Point S2 28.04
Daily Pivot Point S3 27.43
Daily Pivot Point R1 29.58
Daily Pivot Point R2 30.19
Daily Pivot Point R3 30.66

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Four jobs reports in five days: what JOLTS, ADP, claims and the September payrolls mean for the October Fed decisionThe US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
Author  Mitrade
Sep 28, Mon
The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
placeholder
【Daily Brief】30-year Treasury tops 5.59%, S&P 500 slips to 7,670 and gold holds $4,180 — PCE lands tonightThe 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
Author  Suzie
Sep 30, Wed
The 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
placeholder
Gold falls to near $4,150 as higher Treasury yields, oil prices outweigh softer PCE inflationGold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
Author  FXStreet
Yesterday 01: 26
Gold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
placeholder
United States Dollar Index sits near March 2025 highs, above 102.00 ahead of US NFPThe US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts buyers for the fifth straight day and climbs back above the 102.00 mark during the Asian session on Friday.
Author  FXStreet
7 hours ago
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts buyers for the fifth straight day and climbs back above the 102.00 mark during the Asian session on Friday.
Related Instrument
goTop
quote