- The price of Silver, witnessing bloodshed, falls vertically to $27.30 as demand for safe haven assets decreases.
- Demand for safe-haven assets weakens as fears of a worsening conflict in the Middle East diminish.
- The US dollar and bond yields rise as investors believe the Fed will keep interest rates higher for longer.
The price of the Silver (XAG/USD) faces intense selling and falls to $27.30 in the American session on Monday. The white metal declines as investors hope that conflicts in the Middle East region do not worsen further. Fears arising from tensions in the Middle East diminish after Iran commented that it is not currently planning any immediate retaliation to Israel's limited attack on Isfahan.
The decreasing risks of a new escalation of the conflicts between Israel and Iran have weakened demand for safe-haven assets. This has improved investor appetite for risk assets. The S&P 500 opens higher, suggesting a cheerful mood in the markets. The 10-year US Treasury yield rises to 4.65% as investors expect the Federal Reserve (Fed) to lag behind other countries' central banks in easing the tightening policy framework. developed.
CME's FedWatch tool shows traders pricing in the September policy meeting, when the central bank could begin cutting interest rates. Expectations of Fed interest rate cuts have been moved from June to September as policymakers believe progress in lowering inflation to the 2% target has stalled.
On Friday, Chicago Fed President Austan Goolsbee stated: “Given the strength of the labor market and the progress in reducing inflation seen over a longer arc, I believe the Fed's current tight monetary policy is adequate,” Reuters reported.
This has also improved the attractiveness of the US Dollar. The US Dollar Index (DXY) rises to 106.30 as the Fed maintains that interest rates should remain at their current levels for longer.
Silver technical analysis
The price of Silver falls sharply to approach the 20-day EMA, which is trading around $27.20, after failing to extend the rise above the three-year high of $29.80. The horizontal support drawn from the April 14 high at $26.09 will be an important floor for the price of Silver.
The 14-period RSI declines to the 40.00-60.00 range, suggesting that momentum is no longer bullish. However, the bullish trend is intact.
Silver Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
