Key Takeaways:
- Silver price struggles to break above $30.00 amidst rising US bond yields.
- The Fed is expected to cut interest rates in September.
- Investors await US core PCE inflation data for July.
Silver Price Struggles Amidst Rising Yields
Silver price (XAG/USD) is having difficulty extending its gains above the $30.00 mark as US bond yields surge. The near-term forecast for silver remains positive due to expectations of interest rate cuts by the Federal Reserve in September. Investors are closely monitoring the potential size of the rate cut by the Fed.
Probability of Fed Rate Cuts
The CME FedWatch tool data shows a 28.5% chance of a 50-basis point rate cut in September, while the majority anticipates a 25-basis point reduction. San Francisco Fed Bank President Mary Daly has hinted at supporting a quarter-point cut but does not rule out a larger one if labor market conditions worsen.
Impact on USD and Bond Yields
Expectations of Fed rate cuts have put pressure on the US Dollar Index (DXY), pushing it below the year-to-date low. Bond yields have also risen, with the 10-year US Treasury yield nearing 3.86%. The upcoming US core PCE inflation data release for July on Friday is being closely watched.
Silver Technical Analysis
Silver price rebounded after finding support near $29.16 and is poised to reach $31.75. The 20-day EMA near $29.70 supports further upside. The RSI indicates strong upward momentum.
FAQs About Silver
Silver is a valuable commodity often traded for its intrinsic value and as a hedge against inflation. Its price can be influenced by geopolitical events, interest rates, and the USD. Silver is used in various industries due to its high electric conductivity. It tends to follow trends in Gold prices, and the Gold/Silver ratio can provide insights into their relative valuations.
