Key Takeaways:
- Silver price remains stable at the $29.00 support level as investors anticipate Fed policy normalization in September.
- US bond yields are rebounding as Fed officials advocate for only one rate cut this year.
- Investor focus is shifting towards preliminary US S&P Global PMIs for June.
Silver Price Stability Amid Fed Speculation:
In the early European session, the price of silver (XAG/USD) continues to find support at $29.00. Investors are closely watching Federal Reserve (Fed) actions, speculating that interest rates may be reduced starting from the September meeting.
The CME FedWatch tool indicates a 67% probability of rate cuts in September, up from 61.5%. Fed officials are leaning towards only one rate cut this year to monitor inflation levels.
US bond yields have rebounded, impacting the silver price as higher yields increase the cost of holding non-yielding assets like silver.
Investors are now awaiting the release of preliminary US S&P Global PMIs for June.
Silver Technical Analysis:
The silver price is trading in a Falling Channel pattern on a four-hour timeframe. Market participants view each pullback as a selling opportunity, with the asset hovering near the 200-period Exponential Moving Average (EMA) at $29.40.
The 14-period Relative Strength Index (RSI) indicates consolidation ahead.
Silver Four-Hour Chart:
FAQs:
1. Why is the silver price holding at $29.00?
Investors view the $29.00 support level as crucial amid speculation of Fed rate cuts from September onwards, leading to stability in the silver price.
2. How are US bond yields impacting the silver price?
The rebound in US bond yields is increasing the opportunity cost of holding silver, as higher yields make interest-bearing assets more attractive.
3. What are investors focusing on in June?
Investors are closely watching the preliminary US S&P Global PMIs for June to gauge the economic outlook and potential market movements.
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