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Silver’s Surge: $26.89 High Amid Fed Cut Speculation

In the wake of subdued geopolitical concerns and a buoyant market mood, Silver’s (XAG/USD) price forecast remains optimistic, with the commodity trading robustly near the $26.9455 mark, briefly touching a peak of $27.0015.

Silver Price Chart - Source: Tradingview

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US Labor Data Influences Monetary Policy Outlook

The silver market’s recent dip can be traced to the latest US labour statistics, which fell short of expectations, thereby amplifying the likelihood of a Federal Reserve rate reduction come September.

This anticipation has exerted downward pressure on the US dollar, inadvertently supporting silver prices.

Middle East Geopolitical Dynamics and Silver Valuation

Concurrently, the diminishing geopolitical strife in the Middle East, especially the Iran-Israel situation, alongside a risk-on sentiment, may cap potential advances in gold, a traditional haven, thereby indirectly affecting the XAG/USD rate.

Market participants are now keenly awaiting Federal Reserve officials’ speeches, with dovish tones from figures such as Thomas Barkin and John Williams potentially propelling gold—and consequently silver—prices upward.

Anticipated Fed Rate Cut Propels Silver

The US Nonfarm Payrolls expanded by 175,000 in April, missing the projected 243,000 mark and indicating a deceleration from March’s revised figure of 315,000. The Unemployment Rate nudged up to 3.9%, and Average Hourly Earnings saw a year-over-year drop to 4.0% in April.

The ISM Services PMI also retreated, signalling a contraction in the sector. These factors collectively fuel speculation of an impending Fed rate cut, which traditionally benefits silver as it bolsters its appeal as an investment haven.

Technical Analysis and Price Trajectory

As of today, Silver (XAG/USD) has registered a commendable 1.29% uptick, with prices hovering at $26.89185. The metal’s stance above the pivotal $26.82 threshold suggests a bullish trend. A sustained move beyond this pivot could encounter resistances at $27.40, $27.95, and $28.67.

Silver Price Chart - Source: Tradingview

Conversely, a dip below this fulcrum might see supports at $26.05, $25.57, and $25.06 come into play.

Conclusion: Silver’s Bright Outlook

The technical indicators, including the 50-day and 200-day EMAs at $26.90 and $26.59 respectively, lend credence to the current bullish sentiment. A decisive breach of the $26.82 level could catalyze a rally towards $28.67, underscoring a promising future for silver prices.

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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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