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Silver Forecast: Traders Watch Inflation for XAG/USD

Key Points:

  • XAG/USD Silver Forecast drifted lower after Monday’s surprise rally on a low-volume trading day.
  • Inflation data and potential Fed rate cuts are crucial for Silver’s direction.
  • Industrial demand and a strong dollar influence silver market sentiment.
After an unexpected surge in the previous session, XAG/USD Silver Forecast prices gradually fall on Tuesday. The earlier increase took traders unawares on a day with low trading volume owing to U.S. and U.K. vacations. Silver is reaching a pivotal milestone that can lead to additional gains—$32.52, an eleven-year high, thanks to the upswing. At $30.04, we have found a new support level; a decline below here could signal a temporary downturn.

Key Drivers and Market Sentiment

Key Drivers and Market Sentiment

Industrial demand and the same macroeconomic variables affecting gold prices have recently impacted silver prices. Investors are watching inflation data from the United States for signs that the Federal Reserve may lower interest rates. The continued correction in silver prices is greatly endangered by the strong dollar, which may be supported by a change in U.S. monetary policy toward rate hikes.

Inflation Data and Federal Reserve Policy

The preferred inflation indicator of the Federal Reserve, the core Personal Consumption Expenditures (PCE) price index, is due on Friday. Preliminary estimates for PCE data point to improvement over the first quarter, with core inflation expected to be 0.2%, down from 0.3% in March. Inflationary pressures may be softened if consumer spending moderates as projected.

Officials at the Federal Reserve are considering additional rate hikes if inflation stays high, according to the minutes of the most recent policy meeting. There was discussion in the minutes over whether or not the present interest rate levels are restrictive enough to control inflation. Some authorities are open to rate decreases later this year, depending on economic conditions.

Market Forecast

Spot XAG/USD Silver Forecast prices are expected to rise marginally shortly. Industrial demand and the larger economic framework lend credence to an optimistic outlook, even though a strong dollar could put downward pressure. Important U.S. inflation data will not be disclosed until the Federal Reserve knows the future of silver prices. Depending on these economic variables, market mood changes, so traders should be ready for volatility.

Technical Analysis

Technical Analysis

Silver’s recent stellar performance has placed it in a position to test the 11-year high of $32.52, achieved on May 20. Since the next significant target is $34.35, this level might be the catalyst for a rapid acceleration to the upside.

Thirty dollars is the new near-term low. The 50-day moving average, at $27.76, is the next significant target after this, which might accelerate the fall. This indicator regulates the intermediate trend.

Ali Raza

Ali Raza is an experienced freelance content writer. His focus is primarily on aster-crypto and btccoinzone. One might even refer to him as a "blockchain enthusiast." He has been following advancements in the crypto and blockchain area for several years, researching and writing his insights in the media. In addition to being a skilled content writer, Ali Raza is also knowledgeable in SEO and digital marketing. He aspires to succeed as a content creator in the digital realm, dealing with customers in the finance and tech industries to generate traffic through engaging taglines and content. Ali Raza enjoys traveling, reading, and playing cricket when not writing. He now works as a news and article writer for Astercrypto.

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