Silver Price Analysis: XAG/USD juggles around $23.30, remains upbeat on renewed Fed rate cut bets

Silver price consolidates around $23.60 as trading volume is lower than average due to closed US markets.
Investors are more confident about Fed reducing interest rates from March after soft US PPI data.
Deepening Middle East tensions have improved safe-haven appeal.

Silver price (XAG/USD) trades back-and-forth around $23.30 in a thin-volume trading session due to holiday in the US markets on account of Martin Luther King Birthday.

The broader appeal for non-yielding assets is still upbeat as investors seem more convinced about a reduction in interest rates by the Federal Reserve (Fed) from March after the release of the softer-than-projected United States Producer Price Index (PPI) for December. A surprisingly soft US PPI report has eased fears for inflation remaining stubborn ahead.

S&P500 futures have witnessed some losses in the European session, portraying a decline in risk-appetite of the market participants. The US Dollar Index (DXY) has rebounded to near $102.50 as investors expect that optimism about the Fed cutting interest rates earlier than other central banks is reaching maturity. The market participants see the European Central Bank (ECB) and the Bank of England (BoE) also reducing borrowing costs sooner due to vulnerable economic outlook.

This week, market participants will keenly focus on the US monthly Retail Sales data for December. Investors anticipate that the consumer spending grew at a higher pace of 0.4% against 0.3% increase in November.

Meanwhile, the appeal for safe-haven assets has also improved due to deepening Middle East crisis. Iran-backed Houthis rebels have warned about a retaliation for airstrikes by the US and the UK military.

Silver technical analysis

Silver price delivers a sharp recovery after witnessing a selling climax near $22.50. On a 60-minute timeframe, the downside in the Silver price will be supported around January 4 low at $22.69 while the upside will remain capped near December 2023 low at $23.54.

The near-term demand seems positive as the asset is holding above the 50-period Exponential Moving Average (EMA), which trades around $23.10.

Meanwhile, the 14-period Relative Strength Index (RSI) has slipped into the 40.00-60.00 range. This indicates that momentum has faded but upside bias is still intact.

Silver hourly chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : FXStreet – https://www.fxstreet.com/news/silver-price-analysis-xag-usd-juggles-around-2330-remains-upbeat-on-renewed-fed-rate-cut-bets-202401151306