Key economic data like the US PMI and consumer confidence reports are expected to influence silver’s short-term market direction.
Key Points
- Silver dropped 1.73% to $30.960 as markets await US PMI data.
- Silver is supported by a weaker US dollar due to the Fed’s rate cut signals.
- China’s liquidity injections boost industrial demand for silver.
Silver Daily Price Analysis – 23/09/2024
Silver began the week under bearish pressure, with today’s price dipping by 1.73% to $30.960, down from Friday’s close of $31.505. This decline follows a cautious sentiment in the market and a strong US dollar in today’s market, with investors eyeing the upcoming US PMI data, a key indicator of economic activity that could sway market direction.
Despite the bearish sentiment, silver’s appeal remains underpinned by a bearish outlook for the US dollar following the dramatic rate cut last week. The Federal Reserve’s hints at future rate cuts, coupled with a recent 50 basis point rate reduction, have pressured the dollar. This development strengthens silver’s position as a safe haven in uncertain economic climates.
On the global front, China’s aggressive liquidity injections through the People’s Bank of China (PBoC) aim to stimulate economic activity. The central bank injected CNY 74.5 billion in liquidity through a 14-day reverse repo operation and an additional CNY 160.1 billion through a 7-day reverse repo. This action supports industrial demand, which is crucial for silver, given its widespread use in manufacturing and technology sectors.
These monetary moves by the PBoC, combined with stable Loan Prime Rates, signal that China is seeking to boost economic activity. In turn, this could provide upward momentum for silver, as the metal is a key component in industrial applications. As manufacturing activity picks up, the demand for silver may increase, stabilizing prices in the near term.
Key Economic Data and News to Be Released Today
Today’s trading is heavily influenced by the anticipation of several key economic data releases. The US PMI report is among the most closely watched since it offers insights into business conditions across manufacturing and services.
If the PMI data shows signs of economic contraction, it could enhance the appeal of silver as a safe-haven asset. Additionally, the market will keep an eye on the release of US consumer confidence data tomorrow. A dip in consumer confidence could exert additional pressure on the US dollar, making silver more attractive to investors.
Silver Technical Analysis – 23/09/2024
We might be having a bullish retracement or potential reversal on Silver today, even though the price is currently under the 200 EMA. A quick look at the RSI shows that the precious metal is currently oversold.
A key confluence signal to the potential bullish shift in the market is how the price has bounced off the Fibonacci support level at $30.715. We can expect to see the price continue to drive up from here. On the other hand, if the price comes back and closes below this level, we may have to switch to a bearish outlook and look for a better entry to short the market.
Silver Fibonacci Key Price Levels 23/09/2024
Short-term traders planning to trade XAG/USD today should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 31.160 | 31.710 |
| 30.990 | 31.880 |
| 30.715 | 32.155 |
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
