Silver Price Forecast: XAG/USD rises near $28.50 on market caution

  • The price of Silver appreciates as traders become cautious amid expectations that Israel will respond to Iran's attack.
  • The fall of the US dollar supports the advance in demand for Silver.
  • The price of the white metal could suffer, as the Fed could adopt a hawkish stance in its monetary tightening.

The price of Silver rose to around $28.50 per troy ounce during European trading on Wednesday. The safe haven bullion gains ground due to the caution of the markets. Investors are still awaiting Israel's response to Saturday's Iranian airstrike.

A Reuters article reported that the rescheduling of the third Israeli war cabinet meeting, initially scheduled for Tuesday, has been moved to Wednesday. The purpose of this meeting is to discuss and deliberate Israel's response to Iran's unprecedented direct attack.

Furthermore, the slight downward correction of the US Dollar favors the demand for Silver. However, the US Dollar Index (DXY) maintains a position near its five-month high of 106.51 reached on Tuesday. At press time, 2-year and 10-year US Treasury bond yields stood at 4.96% and 4.65%, respectively.

Expectations that the Federal Reserve (Fed) will keep interest rates high for longer, driven by the strength of the US economy and the persistence of inflation. Additionally, Federal Reserve Chairman Jerome Powell's hawkish comments could provide support to the US Dollar (USD). A stronger US dollar tends to make silver more expensive to purchase for investors using other currencies, which could impact demand for the white metal.

On Tuesday, Federal Reserve Chair Powell noted that recent data suggests minimal progress in inflation this year, implying a prolonged period before reaching the 2% target. According to Reuters, this statement could encourage more hawkish sentiment and support the US dollar.

XAG/USD

Panorama
Today's Latest Price 28.46
Today's Daily Change 0.36
Today's Daily Change % 1.28
Today's Daily Opening 28.1
Trends
20 Daily SMA 26.44
SMA of 50 Daily 24.58
SMA of 100 Daily 24.03
SMA of 200 Daily 23.65
Levels
Previous Daily High 29.02
Previous Daily Low 27.95
Previous Weekly High 29.8
Previous Weekly Low 26.88
Previous Monthly High 25.77
Previous Monthly Low 22.51
Daily Fibonacci 38.2% 28.36
Daily Fibonacci 61.8% 28.61
Daily Pivot Point S1 27.7
Daily Pivot Point S2 27.3
Daily Pivot Point S3 26.64
Daily Pivot Point R1 28.76
Daily Pivot Point R2 29.42
Daily Pivot Point R3 29.82

Source: Fx Street

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