Silver Price Forecast: XAG/USD tumbles to $30.30 as US Dollar remains firm ahead of US PMI
- Silver price declines to $30.30 amid firm US Dollar.
- Investors await the preliminary US S&P Global PMI report for June.
- The Fed is expected to cut interest rates twice this year.
Silver price (XAG/USD) falls sharply to near $30.30 in Friday’s American session. The white metal is under pressure as the US Dollar (USD) clings to gains ahead of the preliminary United States (US) S&P PMI data for June, which will be published at 13:45 GMT.
The US Dollar Index (DXY) rises to a six-week high around 105.90 as global PMI figures have failed to meet market estimates, resulting in a dismal market sentiment. The USD Index could face pressure if the US PMI data also fails to match expectations.
Economists expect that the PMI report will show a slower growth in the Manufacturing as well as in Services activity.
Meanwhile, the overall appeal of the Silver price remains upbeat as investors expect that the Fed will start reducing interest rates from the September meeting. Financial markets expect that the Fed will deliver two rate cuts this year instead of one as signaled by policymakers in their latest interest rate projections report.
The expectations for the Fed reducing rates twice this year were prompted by soft US inflation report and slower than-expected growth in Retail Sales data for May. On the inflation outlook, Minneapolis Fed Bank President Neel Kashkari said on Thursday that inflation would return to bank’s target of 2% in up to two years. However, Kashkari remained concerned about high wage growth.
Silver technical analysis
Silver price rebounds after discovering buying interest near the lower border of the Rising Channel chart pattern formed on a daily timeframe. The white metal rises above the 20-day Exponential Moving Average (EMA) near $29.90, suggesting that the near-term trend has turned bullish.
The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating indecisiveness among investors.
Silver daily chart
