Silver Jumps 14% in 2 Months to $40.50: 3 Key Levels Traders Must Track
Silver has hit $40.50, up 1.96% on the day and 14 years high. A combination of macro tailwinds – Fed rate cut bets and safe-haven demand...
Quick overview
- Silver has reached $40.50, marking a 1.96% increase and a 14-year high, driven by macroeconomic factors and technical momentum.
- The CME FedWatch indicates an 89% probability of a 25-basis point rate cut in September, which is expected to boost demand for silver as a non-interest-bearing asset.
- Safe-haven demand is rising due to global uncertainty, positioning silver as both an industrial metal and a hedge, paralleling gold's performance.
- Traders are advised to buy on dips, with key support at $39.56 and potential targets of $41.17 and $42.77 if momentum continues.
Silver has hit $40.50, up 1.96% on the day and 14 years high. A combination of macro tailwinds – Fed rate cut bets and safe-haven demand – and technical momentum is attracting buyers.
Fed Bets and Macro Tailwinds
CME FedWatch now shows 89% chance of a 25-bp rate cut in September. July PCE was above 2% but investors think the Fed will act to support growth. 2Q US GDP was 3.3% vs estimates and confirms the economy is resilient. For silver which competes with interest bearing assets, a softer rate path means lower opportunity cost of holding the metal and more demand.
Safe-haven flows are also in play. With global uncertainty, investors are viewing silver as an industrial metal and a hedge – supporting its parallel move with gold.
Technical Momentum Remains Strong
On the daily chart, silver is inside a rising channel since April. The break above $38.05 unlocked fresh buying and the bullish candlestick sequence “three white soldiers” is a sign of sustained demand.
Momentum indicators are bullish:
- RSI is 71, overbought but trending.
- MACD lines are bullish and expanding.
- 50-day SMA at $37.79 is support and 200-day at $31.77 is the long term bullish structure.
Silver (XAG/USD) Trade Levels
For traders, the cleaner trade is buying dips not chasing highs. A pullback to $39.56 is the mid-channel support and recent breakout zone, a good entry point. Stops can be placed below $38.05 to limit risk and targets are $41.17 and $42.77 if momentum accelerates. Longer term bulls are looking at $44.37 as the next resistance.
This is a patient trade. Silver’s structure of higher lows and higher highs is intact and until we see candlestick signals like Doji or shooting stars, momentum is with the bulls.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save