Key Takeaways
- Silver price falls to near $28.20 as the US Dollar strengthens.
- Traders are undecided about the size of a potential Fed rate cut in September.
- Investors are waiting for US Manufacturing PMI data for August.
Silver Price Decline Amid US Dollar Strength
Silver price (XAG/USD) continues to drop for the third consecutive trading session on Tuesday, nearing $28.20. This decline is primarily driven by the strengthening US Dollar (USD) amidst uncertainty surrounding upcoming economic data releases in the United States (US).
US Economic Data Impact on Silver Price
The US Dollar Index (DXY), which measures the Greenback’s performance against six major currencies, is heading towards a new two-week high of 102.00. Investors are eagerly anticipating the US Nonfarm Payrolls (NFP) data for August, set to release on Friday. This data will play a crucial role in shaping market perceptions about the potential size of an interest rate cut by the Federal Reserve in their September meeting.
Focus on US Economic Data Releases
Apart from the NFP report, traders will closely monitor the JOLTS Job Openings data for July and the ADP Employment Change report for August, scheduled for Wednesday and Thursday respectively. These reports will provide valuable insights into the current status of the labor market and influence market sentiment.
In today’s North American session, investors will be watching the US ISM Manufacturing PMI data for August, set to be released at 14:00 GMT. Although the Manufacturing PMI is expected to show an improvement, any reading below 50.0 signifies a contraction in the sector.
Silver Technical Analysis
Silver price has weakened following a breakdown of the Head and Shoulder chart pattern on a four-hour timeframe. The 20-period Exponential Moving Average (EMA) near $28.80 indicates a bearish trend, while the 14-period Relative Strength Index (RSI) suggests a strong bearish momentum.
Silver FAQs
Silver is a precious metal that is often used as a store of value and as a medium of exchange. It can be purchased physically in the form of coins or bars, or through Exchange Traded Funds (ETFs). Price movements in Silver are influenced by various factors such as geopolitical instability, interest rates, USD performance, investment demand, and industrial usage.
Investors often monitor the Gold/Silver ratio to determine the relative valuation between the two metals. Changes in demand from key economies like the US, China, and India can also impact Silver prices. Additionally, Silver tends to move in tandem with Gold, especially during times of economic uncertainty.