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Silver Price Forecast: Near $28.30 Amidst Israeli-Iran Tensions and Fed Policy
Arslan Butt•Friday, April 19, 2024•2 min read
The Silver market (XAG/USD) has sustained its climb, presently trading near $28.30, buoyed by a confluence of geopolitical tensions and economic indicators. The recent escalation between Israel and Iran has particularly propelled silver, traditionally seen as a safe-haven asset, amid growing regional instability.
Impact of Middle East Conflicts on Silver Prices
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Reports from major news outlets, including ABC News and Reuters, have detailed Israeli missile strikes on targets in Iran, leading to widespread alarm over potential broad-scale conflict. These developments have nudged investors towards safer assets like silver, reinforcing its price during times of geopolitical uncertainty.
Federal Reserve’s Monetary Policy Influences on Silver
Conversely, the U.S. economic policy stance, marked by the Federal Reserve’s hawkish outlook, has bolstered the U.S. Dollar and subsequently increased Treasury yields.
This strength in the dollar, detailed by comments from Federal Reserve officials like Atlanta’s Raphael Bostic and New York’s John Williams, has applied downward pressure on non-yielding assets like silver.
Their remarks underscore a continued commitment to combating inflation without immediate rate cuts, influencing the broader financial markets and the XAG/USD trajectory.
Key Economic Indicators and Their Impact
Recent U.S. economic data also shapes the silver price forecast:
- U.S. Unemployment Claims dropped to 212K, reflecting a healthy job market.
- The Philly Fed Manufacturing Index leapt to 15.5, indicating stronger-than-expected industrial activity.
- However, a decline in Existing Home Sales to 4.19 million signals underlying economic vulnerabilities.
These mixed signals from economic data coupled with the Fed’s stance suggest a complex environment for silver prices. While geopolitical risks elevate silver’s appeal, strengthened U.S. monetary policies and economic indicators could restrain its gains.
Silver Price Forecast Considerations
As the market navigates through these multi-faceted pressures, the silver price forecast remains cautiously optimistic, supported by its status as a safe-haven asset amidst global uncertainties. Silver Price ForecastSilver’s current price stands at $28.29, marking a modest increase of 0.27%.
The metal trades just above the pivotal $28.08 level, suggesting potential for an upward trajectory if it maintains above this threshold. Looking ahead, resistance levels are set at $29.05, $29.80, and $30.68.
A push beyond these could signal continued bullish momentum.
Conversely, support is firmly placed at $27.05, with further floors at $26.23 and $25.62. A dip below these levels might trigger a steeper decline.
Technical indicators show a Relative Strength Index (RSI) at 49, hovering near the neutral zone, while the 50-Day Exponential Moving Average (EMA) aligns closely with the current price at $28.10, reinforcing the significance of the pivot point.
In summary, the market’s stance on Silver remains cautiously optimistic as long as it stays above the pivot. A break below could, however, catalyze a bearish trend.
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ABOUT THE AUTHOR
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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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