Silver prices dropped to $31 per ounce on Tuesday, continuing their decline for the second consecutive day. This downward trend is mainly due to a stronger U.S. dollar and rising Treasury yields.
The daily chart below demonstrates the current Silver (XAG/USD) price.
Impact of U.S. Jobs Data
The recent U.S. employment data, which turned out better than anticipated, significantly influenced investor sentiment. As a result, investors have adjusted their expectations regarding the Federal Reserve’s interest rate decisions. They now believe the chances of a substantial rate cut of 50 basis points in November are unlikely.
Anticipating Key Economic Updates
Looking forward, market participants are eagerly awaiting further insights from the upcoming Federal Reserve meeting minutes, which are due this Wednesday.
Additionally, the consumer price index (CPI) report, scheduled for release on Thursday, is expected to provide more direction on the trajectory of U.S. interest rates.
Global Influences and Industrial Demand
Recently, China’s National Development and Reform Commission shared an update that lacked clear information about new economic stimulus plans. This uncertainty worries investors because Silver is essential in China for its use in renewable energy.
It’s mainly used to make solar panels and in technologies that help generate electricity. The lack of news about stimulus measures is adding to the reasons why silver prices are falling.
Silver Technical Analysis – 8-October-2024
FxNews—Silver price crossed below the 100-period simple moving average, reversing the trend from bullish to bearish. As of this writing, the XAG/USD pair is about to test the $30.9 (September 30 Low).
Additionally, the Stochastic oscillator depicts 18 in the description. That is below the 20 line, meaning Silver is oversold in the short term, and it might bounce from this point and consolidate before the downtrend resumes.
- The Awesome oscillator bars shifted below the signal line, indicating the bear market builds more strength.
Overall, the technical indicators suggest the primary trend shifted to bearish, and Silver will likely decline after a minor consolidation.
Silver Forecast – 8-October-2024
The immediate support is at the September 30 low, the $30.9 mark. From a technical perspective, the bearish wave from $32.7 will likely spread to the September 18 low at $30.2 if bears close and stabilize the Silver price below the immediate support ($30.9).
Furthermore, if selling pressure pushes the price below $30.2, the next bearish target could be the 61.8% Fibonacci retracement level at $29.7, neighboring the September 18 low.
Silver Bullish Scenario – 8-October-2024
The bearish scenario should be invalidated if the XAG/USD conversion rate flips above the immediate resistance at $31.4 or the 100-period SMA.
If this scenario unfolds, the Silver price will likely resume the previous bullish trend and initially revisit the September 2024 high, the $32.7 mark.
The 100-SMA is the main support for the bullish scenario if the price crosses above this moving average.
Silver Support and Resistance Levels – 8-October-2024
Traders and investors should closely monitor the key levels below to make informed decisions and adjust their strategies accordingly as market conditions shift.
- Support: $30.9 / $30.2 / $29.7 / $29.1
- Resistance: $31.4 / $31.8 / $32.7
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
