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Silver Price Forecast: XAG/USD struggles amid strong US data, Fed’s caution stance

  • Silver price down 1.58%, nearing $22.50, amid strong US Retail Sales and Industrial Production data.
  • Waller's comments on cautious rate cuts prompt market to rethink Fed easing expectations."
  • Technical outlook: Further silver price decline possible, with focus on $22.00 and $21.88; $23.00 critical for recovery.

Silver price stays depressed for the second straight day, though it appears to have bottomed at around the $22.50 area for the third occasion during the last couple of months, as it loses 1.58% after hitting a daily high of $22.94.

XAG/USD falters, bottoms at around $22.50 as investors adjust Fed rate cut trajectory

Fundamentally speaking, solid economic data from the United States (US) bolstered the Greenback (USD) as US Treasury yields resumed to the upside. Retail Sales for December rose by 0.6%, exceeding forecasts of a 0.4% jump and November’s reading. Lately, the US Federal Reserve announced that Industrial Production improved modestly by 0.1%, after contracting and stagnating in October and November of last year.

Meanwhile, Fed officials continued to push back against aggressive rate cuts, even though most of them see at least three rate cuts, as portrayed by December’s Summary of Economic Projections (SEP). Yesterday’s comments of Fed Governor Christopher Waller, who said that he supports rate cuts but added the US central bank is in no rush to relax policy. That sparked a reaction on bets that the Fed would ease policy faster than expected, as seen with investors trimming odds from 175 basis points of rate cuts at the beginning of the week to 148.

XAG/USD Price Analysis: Technical outlook

Therefore, further Silver’s weakness is expected, though sellers must push prices below $22.50. A breach of that level will expose the $22.00 a troy ounce figure, followed by the November 13 swing low of $21.88. Further downside is seen at the October 3 low of $20.69. Contrarily, if buyers regain $23.00, that could pav the way for challenging the 100-day moving average (DMA) at $23.20.

XAG/USD Technical Levels

XAG/USD

Overview
Today last price22.53
Today Daily Change-0.39
Today Daily Change %-1.70
Today daily open22.92
 
Trends
Daily SMA2023.54
Daily SMA5023.67
Daily SMA10023.24
Daily SMA20023.61
 
Levels
Previous Daily High23.25
Previous Daily Low22.86
Previous Weekly High23.53
Previous Weekly Low22.48
Previous Monthly High25.92
Previous Monthly Low22.51
Daily Fibonacci 38.2%23.01
Daily Fibonacci 61.8%23.1
Daily Pivot Point S122.77
Daily Pivot Point S222.62
Daily Pivot Point S322.38
Daily Pivot Point R123.16
Daily Pivot Point R223.4
Daily Pivot Point R323.55

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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