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November 7, 2024
PI Global Investments
Silver

Silver (XAG) Forecast: Traders Eye Gold Surge as Catalyst for Silver Rally


Daily US Dollar Index (DXY)

The U.S. dollar’s stability has offered indirect support for silver, especially as it pulled back from recent highs. Dollar fluctuations can have a direct impact on silver prices, as a stronger dollar tends to weigh on commodities priced in dollars. However, recent dollar steadiness, coupled with upcoming U.S. election uncertainties and expectations of a Fed rate cut, has helped maintain silver’s appeal among investors seeking safe-haven assets.

Federal Reserve’s Rate Decision and Economic Data in Focus

Market participants are closely awaiting the Federal Reserve’s November 7 rate decision, with a 97% probability priced in for a 25-basis-point cut according to CME’s FedWatch Tool. Economic indicators due this week, such as job openings, ADP employment data, and the core PCE price index, could influence the Fed’s tone. Should data support rate cuts, this could prove favorable for silver by reducing the opportunity cost of holding non-yielding assets, further enhancing silver’s hedge potential against economic uncertainty.

Silver Market Forecast

Silver’s near-term outlook leans cautiously bullish as prices edge higher. However, resistance levels at $34.35 and $34.87 remain significant barriers. Breaking above these could set silver on course to test the critical $35.40 level. If silver fails to clear these levels, it risks a retracement toward $33.08, with the next support at $32.49 in focus. Traders should watch the dollar, Treasury yields, and economic data closely, as they will likely influence silver’s direction through year-end.



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