Silver (XAG/USD) is currently trading below the $30.00 mark, with an intraday low of $26.98. This decline reflects a shift in market sentiment towards riskier assets, triggered by diminishing geopolitical tensions in the Middle East. The reduced demand for silver as a safe haven has contributed to its recent downtrend.
Furthermore, expectations of sustained elevated interest rates by the U.S. Federal Reserve have strengthened the U.S. dollar, exerting additional downward pressure on silver prices. This sentiment has been reinforced by the diminished likelihood of near-term rate cuts by the Fed.
Investors are exercising caution as they await further indicators on the Fed’s monetary policy direction. Key upcoming U.S. economic data, including today’s Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index on Friday, are expected to influence silver’s price movements as traders seek definitive signals to guide their investment decisions.
The Federal Reserve’s commitment to prolonged higher interest rates, driven by ongoing inflation concerns, has constrained the upside potential for non-yielding metals like silver. This stance, supported by robust consumer inflation data and hawkish remarks from Fed officials, has solidified market expectations of no rate cuts until at least September.
On the economic front, the initial estimate of U.S. GDP for Q1 is anticipated to reveal a growth rate of 2.5%, signaling a slowdown from the previous quarter. While Durable Goods Orders surged by 2.6% in March, indicating some positive momentum in the manufacturing sector, new orders excluding transportation only rose by 0.2%, suggesting a more tempered growth trajectory.
Easing geopolitical tensions in the Middle East have influenced a shift in global risk sentiment, impacting the demand for safe-haven assets like silver. Iran’s reduction of military presence in southern Syria, accompanied by the replacement of personnel, has contributed to market stability and decreased demand for silver.
In terms of technical analysis, Silver is currently trading at $27.11, indicating a bearish bias in the near term. Resistance levels are seen at $28.79, $29.57, and $30.51, while support levels lie at $26.52, $25.68, and $24.72. The 50-day Exponential Moving Average (EMA) at $27.68 suggests resistance, with the 200-day EMA at $26.47 providing support. Given the current setup, Silver remains bearish below $27.50.
