Silver (XAG/USD) Price Forecast: Trading at $30.50 Amid Middle East Tensions

Despite strong U.S. economic indicators and a strengthening U.S. dollar, silver prices (XAG/USD) recovered from initial losses to stabilize around $30.4955, later peaking at $30.5025.

Silver Price Chart - Source: Tradingview

This resilience in silver prices, despite data suggesting potentially sustained high U.S. interest rates, can be attributed to escalating geopolitical tensions in the Middle East, which traditionally boost demand for safe-haven assets like silver.

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Geopolitical Unrest Fuels Silver Prices

The ongoing crisis in the Middle East supports silver prices. Recent escalations have displaced over 900,000 Palestinians, leading to critical shortages of basic necessities and healthcare services in Gaza.

The substantial casualties and injuries reported reinforce silver’s status as a preferred safe-haven investment during geopolitical instability.

Impact of Strong US Economic Data on Silver Prices

Conversely, strong U.S. economic data has buoyed the U.S. dollar and shifted expectations towards enduring higher interest rates. The probability of the Federal Reserve maintaining the current interest rate into September has increased significantly, reflecting heightened market anticipation of sustained monetary tightness.

Recent declines in U.S. jobless claims and improvements in manufacturing and service sectors underscore a robust economy, traditionally pressuring precious metal prices.

Silver Price Forecast: Technical Outlook

Currently, silver trades at $30.39, marking a 0.88% increase. Technical analysis reveals a pivot point at $30.05, with immediate resistance at $30.97 and further resistance at $31.60 and $32.39.

Conversely, support lies at $29.44, extending down to $28.79 and $28.10.

Silver Price Chart

The Relative Strength Index (RSI) is at 46, indicating neutral momentum, while the 50-day Exponential Moving Average (EMA) at $30.76 poses significant resistance.

The prevailing technical stance suggests a bearish outlook below $30.97; however, breaching this resistance might pivot the trend to bullish. Traders should focus on these critical levels for potential market shifts.

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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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