XAG/USD Holds Tentative Support Below $32, Outlook Weakens
XAG/USD holds tentative support below $32, but the overall outlook stays fragile
FUNDAMENTAL OVERVIEW:
- Silver price finds limited support below $32.00 as markets await Fed Chair Powell’s speech.
- Improved US-China trade relations have reduced demand for safe-haven assets, with China temporarily lifting non-tariff restrictions on 45 US entities.
Silver price (XAG/USD) rebounds toward $32.00 during Thursday’s European session after dipping to a monthly low near $31.65 earlier in the day. However, the overall outlook remains bearish amid improving US-China trade relations.
US Treasury Secretary Scott Bessent indicated ongoing negotiations aimed at preventing renewed trade tensions, stating, “We are going into a series of negotiations with China to prevent escalation again.”
In response, Beijing has also taken steps to ease tensions, with the Chinese Commerce Ministry suspending non-tariff measures on 45 US entities following a recent agreement for a 90-day truce and a mutual tariff reduction of 115%.
Easing US-China trade tensions have prompted investors to re-evaluate the global economic outlook. In theory, a stronger global economy tends to curb demand for safe-haven assets like Silver.
Meanwhile, market participants are closely watching for comments from Federal Reserve Chair Jerome Powell, who is set to speak during the North American session.
Silver may come under additional pressure if Fed Chair Jerome Powell signals that interest rates will remain unchanged amid economic uncertainty driven by new policies from President Donald Trump. Prolonged higher interest rates typically weigh on non-yielding assets like Silver.
Read More – Daily Technical Analysis By Capital Street FX
SILVER TECHNICAL ANALYSIS CHART:
Technical Overview:
XAG/USD is trading within a down channel.
XAG/USD is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Neutral Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 32.60
Immediate support level: 31.65
HOW TO TRADE XAG/USD
Having surged significantly, Silver encountered stiff resistance, leading to a sharp and aggressive reversal. Subsequently, it found support and attempted to move higher but failed to overcome the prior resistance level. This resulted in a period of consolidation, which has now resolved with a downside breakout. Currently, the price is pulling back towards the immediate resistance zone. A rejection from this upper level could signal further declines.