Silver (XAG/USD) experienced a notable uptick on Tuesday, trading around $58.50 and rising nearly 2% on the day, following softer-than-expected US inflation data. This data release tempered expectations for a near-term Federal Reserve interest rate hike and led to a weaker US Dollar. According to the CME FedWatch Tool, the probability of a July rate hike dropped to 12% from 40%, while the odds for a September increase eased to 59% from 74% [1].
Despite the positive price movement, the technical outlook for Silver remains bearish. XAG/USD continues to trade well below its 50-day, 100-day, and 200-day Simple Moving Averages, and remains within a downward parallel channel just under the upper boundary at $60. The Relative Strength Index (RSI) stands at 39, indicating mildly bearish momentum, while the MACD indicator, marginally above zero at 0.32, suggests a slight loss of downside momentum but does not yet challenge the prevailing bearish bias [1].
On the upside, resistance levels are identified at the channel’s upper boundary near $60, with further barriers at $62.50, $69.35 (50-day SMA), $70.42 (200-day SMA), and $73.56 (100-day SMA). On the downside, immediate support is at $55.50, with a more distant structural floor at $48.50 if selling pressure intensifies [1].
Market participants are also monitoring oil-driven inflation risks amid escalating tensions in the Middle East, which could keep the possibility of a Fed rate hike later in the year open. While momentum indicators show early signs of easing selling pressure, the overall technical structure remains bearish for Silver [1].
CONCLUSION
Softer US inflation data has provided a short-term boost to Silver prices and reduced expectations for imminent Fed rate hikes. However, the technical outlook remains bearish, with significant resistance levels overhead and ongoing geopolitical risks potentially influencing future price action.