XAG/USD climbs toward $32.50 as the US Dollar Index tumbles amid mounting economic concerns in the U.S.
FUNDAMENTAL OVERVIEW:
- Silver prices surge toward $32.50 as the US Dollar weakens amid rising economic concerns.
- Investors remain cautious ahead of the US CPI data, seeking clarity on the future interest rate trajectory.
Silver price (XAG/USD) surges sharply toward $32.50 during Tuesday’s European session, bolstered by a significant sell-off in the US Dollar (USD). Investor sentiment has turned cautious regarding the United States’ economic outlook amid concerns over former President Donald Trump’s tariff policies. As a result, the US Dollar Index (DXY), which measures the Greenback against six major currencies, has declined to around 103.35, marking its lowest level in four months. A weaker US Dollar enhances the appeal of precious metals like Silver, driving increased investor interest.
Market participants are increasingly concerned that President Trump’s tariff policies could lead to an economic slowdown in the United States. On Friday, Trump stated, “There is a period of transition because what we are doing is very big.” Historically, such transitions have been associated with short-term economic turbulence. Rising economic uncertainties have strengthened safe-haven demand for precious metals like Silver.
Meanwhile, investors are focused on the upcoming release of the US Consumer Price Index (CPI) data for February, scheduled for Wednesday. This inflation report is crucial, as it will shape market expectations regarding the Federal Reserve’s (Fed) monetary policy stance. Analysts anticipate a slowdown in inflationary pressures, which could reinforce speculation that the Fed may cut interest rates at its May policy meeting. According to the CME FedWatch tool, the probability of a rate cut in May has climbed to 51% from 37% a day earlier. Lower interest rates typically enhance the appeal of non-yielding assets such as Silver.
SILVER TECHNICAL ANALYSIS CHART:
Technical Overview:
Silver is trading within an up channel.
Silver is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Neutral trend.
Immediate Resistance level: 32.60
Immediate support level: 32.00
HOW TO TRADE SILVER
After an initial upward move, Silver faced rejection, leading to a downside retracement until it found strong support, triggering a reversal to the upside. Currently, Silver has broken through a key resistance level, followed by a pullback, and is once again attempting an upward move. The metal is approaching its immediate resistance; a successful breakout above this level could pave the way for further upside momentum.