Silver (XAG/USD) is trading at approximately $60.70 during the Asian session on Tuesday, maintaining losses from Monday and staying below the $61 mark ahead of the release of US Job Openings data for August at 14:00 GMT [1]. The market is under pressure due to widespread confidence that the Federal Reserve will implement further interest rate hikes this year, which diminishes the appeal of non-yielding assets like silver [1]. According to TD Securities, an October rate hike is increasingly likely, with expectations for two additional hikes in October and January, as inflation remains above target and US economic data shows resilience [1]. The CME FedWatch tool indicates a 70% probability of a rate hike at the Fed's October meeting [1].
Investors are closely watching the upcoming US JOLTS Job Openings report, which is forecasted to show 7.23 million new jobs in August, slightly lower than July's 7.271 million [1]. On the geopolitical front, diplomatic hopes between the US and Iran have improved, with both nations discussing proposals via Qatari mediators, as confirmed by Iran's Foreign Minister Abbas Araghchi [1].
Technical analysis reveals that XAG/USD is trading at $60.63, maintaining a bearish tone as it remains well below the 20-period Exponential Moving Average (EMA) at $64.30. The Relative Strength Index (RSI) stands at 38.6, just above oversold territory, indicating persistent downside pressure [1]. Resistance levels are identified at $62.50 and $64.30, while the psychological support is at $60 [1].
Analysts from TD Securities suggest that the economy can handle more restrictive monetary policy, and the Fed is now providing it. The evolution of inflation data will determine the extent and pace of future hikes [1].
CONCLUSION
Silver prices remain under pressure as expectations for further Fed rate hikes weigh on the market, with technical indicators pointing to continued bearish momentum. The upcoming US Job Openings data and ongoing US-Iran diplomatic discussions are being closely watched for potential market impact. Overall, sentiment is negative for silver in the near term, with sellers retaining control.