Bulls and Bears Battle at Key Technical Level
Spot silver rose, breaking a three-day losing streak, while U.S. silver futures also gained ground. The dollar index fell 0.1%, making silver more attractive to overseas buyers. Concurrently, the 10-year U.S. Treasury yield declined, further supporting precious metals.
Traders are closely watching the 200-day moving average at $26.08, which has been guiding the market higher since early March. A failure to maintain prices above this level could trigger a significant downturn. However, the shallow correction following Monday’s sell-off has provided investors with confidence to re-enter long positions.
Economic Headwinds vs. Monetary Tailwinds
Concerns about industrial demand from China and the U.S. due to signs of economic slowdown are limiting silver’s gains. However, continued U.S. data weakness and debt concerns are expected to ultimately support prices.
Wall Street Giants Bet on Fed’s Next Move
Major brokerages, including J.P. Morgan, Citigroup, and Wells Fargo, have forecast a 50-basis-point interest rate cut by the Federal Reserve in September. This follows last week’s U.S. jobs data, which hinted at a cooling labor market.
Jobless Claims: The Next Market Catalyst?
Market focus now shifts to the weekly initial U.S. jobless claims data, due at 1230 GMT. This report could provide further insights into the labor market’s health and influence rate cut expectations.
Geopolitical Chess: Middle East Tensions Simmer
Recent geopolitical events, including the killing of senior Hamas and Hezbollah members, have raised concerns about potential retaliatory strikes by Iran against Israel. Such tensions typically support safe-haven assets like silver.