Silver Daily Price Analysis – Rally Extends as Fed Speculation Grows

Silver has continued its bullish momentum, currently trading at $30.125, following a 2.66% gain from last Friday.

Key Points

• Expectations of a Fed rate cut in September are driving silver’s rally.
• Geopolitical tensions have boosted silver as a safe-haven asset.
• Upcoming US Consumer Confidence and PPI data could impact silver prices.

Silver Daily Price Analysis – 26/08/2024

Silver has continued its bullish momentum, opening today at $29.880 and currently trading at $30.125, reflecting a gain of 1.02% so far. This follows a significant 2.66% increase from last Friday when silver closed at $29.820 after opening at $28.985. The precious metal’s strong performance is largely attributed to rising expectations of an interest rate cut by the Federal Reserve, which has bolstered the appeal of zero-yield assets like silver.

Last week, Federal Reserve Chair Jerome Powell, in his address at the Jackson Hole Economic Symposium, signaled a shift in monetary policy, citing rising risks to the labor market. His remarks have reinforced market expectations that the Fed may start cutting rates as early as September. The prospect of a more dovish monetary stance from the Fed has been a key driver behind the rally in silver prices, as lower interest rates typically weaken the dollar and reduce the opportunity cost of holding non-yielding assets like silver.

The geopolitical landscape has also played a role in silver’s recent gains. Over the weekend, heightened tensions in the Middle East, following missile attacks by Hezbollah on Israel, spurred safe-haven flows into precious metals. This geopolitical uncertainty has provided an additional layer of support for silver, helping it recover from prior session losses.

As we move through the current trading day, silver continues to benefit from the bullish sentiment surrounding a potential Fed rate cut. However, traders should remain cautious as the market awaits further economic data that could influence the Fed’s decision. High-impact releases, including the US Core PCE Price Index and consumer sentiment data, are scheduled later this week and could provide further direction for silver prices. Should these indicators point to persistent inflationary pressures or an improving economic outlook, the Fed might adopt a more measured approach to rate cuts, which could temper silver’s upward trajectory.

Key Economic Data and News to Be Released Today

For today, while there are no high-impact economic releases scheduled, traders should keep an eye on the broader market sentiment and any developments in the geopolitical landscape. Looking ahead, the US Consumer Confidence Index and Producer Price Index (PPI) data due later this week could provide further insight into the state of the economy and influence the Fed’s decision-making process. If these indicators point to weakening consumer sentiment or rising inflationary pressures, it could reinforce expectations for a more dovish monetary policy stance, potentially driving silver prices higher.

Visit our Economic Calendar

Silver Technical Analysis – 26/08/2024

Silver has been steadily climbing from around $29.180, reaching current levels above $30.00. The price action suggests that bullish momentum is still strong, particularly with silver trading near its session highs.

However, the RSI suggests that while the bullish momentum is strong, the asset might be due for a short-term pullback or consolidation phase to cool off before potentially resuming its upward movement.

Silver Fibonacci Key Price Levels 26/08/2024

Short-term traders planning to trade XAG/USD today should keep a close eye on the following key price levels for the day: