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- Silver rose by 0.49, supported by lower US inflation data and expectations of a Fed rate cut.
- Technical analysis shows bearish trends; RSI indicates selling pressure with lower highs and lower lows.
- Resistance levels: $29.19 (50-day moving average), $31.54 (June 7 high), $32.00, $32.51 (year-to-date high).
- Support points: $29.00, $28.28 (June 10, 2021 high), $28.00, $27.01 (May 8 low), $26.82 (100-DMA).
silver The price recorded gains of 0.49% as a result of inflation figures released by the US Economic Bureau analysis (BEA) fell as expected, reigniting Fed rate cut hopes among investors. Therefore, the US dollar fell, while XAG/USD traded at $29.13 after hitting a daily low of $28.78.
XAG/USD price analysis: technical outlook
After forming what looks like a “double top,” silver extended its losses, which amounted to more than 10% after peaking at around $32.51 on May 20. The uptrend seems to have run out, as evidenced by various signals: the momentum has turned bearish with the Relative Strength Index (RSI) entering the seller zone, while a series of lower highs and lower lows confirm the trend change.
If buyers want to regain control, they need to clear the 50-day moving average (DMA) at $29.19. Once cleared, the next level would be the June 7 high at $31.54. Clearing this level would mean reaching $32.00 before challenging the year-to-date high at $32.51.
Conversely, and the path of least resistance, if XAG/USD drops below $29.00, it could trigger the June 10, 2021 high, which turned into support at $28.28, before exposing the psychological level at $28.00.
Key support levels lie below the latter, with the May 8 swing low at $27.01 before challenging the 100-DMA at $26.82.
XAG/USD price action – daily chart
Economic indicator
Personal Consumption Expenditures – Price Index (MoM)
The Personal Consumption Expenditures (PCE) report, released monthly by the U.S. Bureau of Economic Analysis, measures changes in the prices of goods and services purchased by consumers in the United States. The monthly figure compares prices in the U.S. reference month to the previous month. Price changes can cause consumers to switch from one good to another and the PCE deflator can take such substitutions into account. This makes it the Federal Reserve’s preferred measure of inflation. In general, a higher reading is considered bullish for the U.S. dollar (USD), while a lower reading is considered bearish.
