On Tuesday, silver (XAG/USD) traded nearly flat, holding most of Friday’s losses and changing hands at $66.60 at the time of writing, with price action contained within the previous day’s range [2]. The broader bullish trend from late July lows remains intact, but the failure to breach Monday’s high of $67.47 could increase pressure on the key support area around $65.50 [2]. Technical analysis indicates that XAG/USD is trading at $66.47 after a sharp reversal from the $71.00 area last week. While the near-term structure remains positive, Friday's bearish engulfing candle signals a potential for a deeper reversal if the $65.50 support is broken, with further downside risk toward the August 19 low at $62.20 [2]. Momentum indicators are mixed: the Relative Strength Index (14) is mildly positive above 50, but the MACD has turned negative, suggesting a waning bullish phase and increased risk of a corrective pullback [2].
The subdued price action in silver coincides with a calm trading session for precious metals and low volatility in the US Dollar [2]. The US Dollar Index, after falling about 0.3% on Monday, was holding marginal gains around 99.50 in the European morning on Tuesday [1]. The USD was strongest against the New Zealand Dollar, gaining 0.26%, and posted smaller gains against other major currencies [1]. Market participants are awaiting preliminary August inflation readings from the Eurozone and mid-tier US macroeconomic data releases, including JOLTS Job Openings for July and the ISM Manufacturing PMI for August, which are expected later in the American session [1].
The recent impulse from US Federal Reserve Chairman Kevin Warsh’s hawkish comments on Friday has faded, and investors are now looking ahead to key employment data due later in the week for further clues on the outcome of September’s monetary policy decision [2]. US Treasury Secretary Scott Bessent commented that core inflation remains "very restrained" and suggested that traditionally, interest rates should not be raised into a supply shock, though he declined to speculate on the Federal Reserve’s next move [1]. Meanwhile, US President Donald Trump reiterated his view that interest rates are too high and expressed confidence in Fed Chair Kevin Warsh [1].
Analysts at BNP Paribas noted that political pressure on the Federal Reserve has intensified, with President Trump "relentlessly attacking the Federal Reserve" [1]. This environment of heightened political scrutiny and anticipation of upcoming economic data has contributed to the current cautious tone in both currency and precious metals markets.
CONCLUSION
Silver prices are consolidating above key technical support amid subdued US Dollar volatility and cautious market sentiment ahead of significant US and Eurozone economic data releases. Investors are closely monitoring upcoming employment and inflation figures, as well as ongoing political pressure on the Federal Reserve, for further direction in both the currency and precious metals markets.