Silver Price Forecast: XAG/USD depreciates to $30.50 due to improved US yields

The non-yielding Silver loses ground as US Treasury yields edge higher.
Silver prices could strengthen as the Fed is expected to deliver at least a 25 basis-point rate cut in 2024.
The safe-haven demand for Silver diminishes by easing tensions in the Middle East.

Akhtar Faruqui FXStreet

Silver price retraces its recent gains, trading around $30.50 per troy ounce during the Asian session on Tuesday. The upward correction in the US Treasury yields dampened the demand for non-yielding assets like Silver.

However, Silver price could limit its losses due to growing expectations of interest rate cuts by the Federal Reserve (Fed) in 2024. This sentiment is reinforced by the unexpected drop in the ISM Manufacturing PMI to 48.7 in May, down from April's reading of 49.2 and below the forecast of 49.6. The US manufacturing sector experiencing its second consecutive month of contraction, marking the 18th in the last 19 months.

Traders increasingly bet on the possibility of rate cuts by the US Federal Reserve (Fed) this year. According to the CME FedWatch Tool, there is nearly a 60% probability of the Fed lowering the policy rate by at least 25 basis points in September.

The safe-haven appeal of Silver has been affected by the easing tensions in the Israel-Hamas conflict in the Middle East. As reported by Reuters on Monday, the US is seeking support from the United Nations Security Council for President Joe Biden's proposal to halt the fighting between Israel and Palestinian militants Hamas in the Gaza Strip. Israeli Prime Minister Benjamin Netanyahu's administration reluctantly accepted President Biden's cease-fire proposal for Gaza on Sunday.

XAG/USD

Overview
Today last price	30.54
Today Daily Change	-0.19
Today Daily Change %	-0.62
Today daily open	30.73

Trends
Daily SMA20	30.09
Daily SMA50	28.26
Daily SMA100	25.77
Daily SMA200	24.52

Levels
Previous Daily High	30.81
Previous Daily Low	29.78
Previous Weekly High	32.3
Previous Weekly Low	30.19
Previous Monthly High	32.51
Previous Monthly Low	26.02
Daily Fibonacci 38.2%	30.42
Daily Fibonacci 61.8%	30.17
Daily Pivot Point S1	30.07
Daily Pivot Point S2	29.41
Daily Pivot Point S3	29.04
Daily Pivot Point R1	31.1
Daily Pivot Point R2	31.47
Daily Pivot Point R3	32.13

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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