**Key Takeaways:**
– Silver is showing bearish signals and has diverged from gold’s performance.
– Economic factors such as a stronger dollar, higher Treasury yields, and weakening industrial demand are weighing on silver.
– Market expectations for a Fed rate cut in September have affected silver’s performance.
– Recent comments from Fed officials have added complexity to the rate cut outlook.
**Bearish Signs in Silver Market**
Despite recently reaching an 11-year high, silver is now displaying bearish signals. The metal’s performance has separated from that of gold, which was trending towards record highs, and the divergence between the two has only grown stronger over the past week. On Friday, both metals experienced a downturn, indicating a shift towards bearish sentiment.
**Impact of Economic Factors**
Silver’s decline can be attributed in part to a stronger dollar and higher Treasury yields which have put pressure on both silver and gold. Moreover, the signs of a weakening economy have affected industrial demand for silver, further contributing to its price decrease.
**Expectations for Fed Rate Cut**
Silver’s recent performance has also been influenced by market expectations for a Federal Reserve interest rate cut in September. The high probability of a rate cut at the upcoming meeting has created uncertainty and may have led to a scenario where late buyers are getting trapped in anticipation of the event.
**Fed Officials’ Statements**
Recent remarks from Federal Reserve officials have complicated the outlook for a rate cut. While San Francisco Fed President Mary Daly has emphasized the importance of more data on inflation reduction, Fed Governor Christopher Waller has suggested that rate cuts may be necessary soon but cautioned that a final decision has not yet been made.
**Market Forecast and Technical Analysis**
In the short term, the outlook for silver appears bearish with potential for further downside, especially after breaking below the 50-day moving average. Traders should keep an eye out for a possible test of the $28.57 support level. Conversely, the long-term outlook remains cautiously optimistic, dependent on Fed policy decisions and economic data releases. Investors should pay attention to next week’s personal consumption expenditure price index for additional insight into potential Fed actions.