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Silver ($XAG) Commodity Forecast: Down 6.4% Today

Morpher AI identified a bearish signal. The commodity price may continue to fall based on the momentum of the negative news.

What is Silver?

Silver is a precious metal widely used in industrial applications, jewelry, and investment. Today, the silver market experienced a strong bearish movement.

Why is Silver going down?

XAG commodity is down 6.4% on Jun 7, 2024 18:23

  • Silver prices retreated from an 11-year high of $32 per ounce to below $30 as strong economic data in the United States supported a hawkish outlook for the Federal Reserve, leading to a decline in demand for non-yielding bullion assets like silver.
  • The US imposing 50% tariffs on Chinese imports of solar cells, a key industry for silver, contributed to the decline as it disrupted demand for panels in key factories in Asia, although strong domestic demand in China partially offset the drop.
  • Expectations of rate cuts by major central banks, such as the ECB and BoC, reduced the opportunity cost of holding non-yielding assets like silver, further pressuring prices.
  • Despite the retreat, silver managed to trade above $30 per ounce, indicating some resilience in the market amidst the various economic and geopolitical factors influencing its price movements.

XAG Price Chart

XAG News

Silver Extends Decline from 11-Year High

Silver prices sank to below $29.4 per ounce, retreating sharply from the 11-year high of $32 touched on May 28th, tracking a broad decline for bullion as strong economic data in the United States backed a hawkish outlook for the Federal Reserve. Non-farm payrolls rose much more than expected by markets in May, reigniting evidence of a strong labor market and pressuring US Treasuries, limiting demand for non-yielding bullion assets. Precious metals were also lowered by the PBoC halting its streak of gold buying, among the key triggers for the asset class’s strong performance this year. In the meantime, the US imposed 50% tariffs on Chinese imports of solar cells, among the biggest industries for silver in an industrial end, to pressure output in panels throughout key factories in Asia with corporate bases in China. Still, strong demand in the domestic Chinese markets prevented a further drop, underscored by the connection of the world’s largest solar farm in northwestern Xinjiang.

Silver Pulls Back from 11-Year High

Silver prices fell to $30.5 per ounce, retreating from the 11-year high of $32 touched on May 28th as markets continued to assess the industrial backdrop for key sectors and the extent of dovish policy by major central banks. The US imposed 50% tariffs on Chinese imports of solar cells, among the biggest industries for silver in an industrial end, to halt demand for panels throughout key factories in Asia with corporate bases in China. Still, strong demand in the domestic Chinese markets prevented a further drop, underscored by the connection of the world’s largest solar farm in northwestern Xinjiang. Also limiting the decline, expectations that major central banks are due to cut key interest rates in upcoming decisions trimmed the opportunity cost to hold non-yielding bullion assets. The ECB and BoC both commenced their rate cut cycles and the latter signaled there are more cuts to come, while the Fed, BoE, and the PBoC are expected to lower borrowing costs in the third quarter.

Silver Retreats from 11-Year High

Silver prices fell to below the $30 per ounce mark, retreating from the 11-year high of $32 touched on May 28th as markets continued to assess the rate outlook for major central banks and the industrial backdrop for key silver consumers. The US imposed 50% tariffs on Chinese imports of solar cells, among the biggest industries for silver in an industrial end, to halt demand for panels manufactured with corporate bases in China throughout key factories in Southeast Asia. Still, strong demand in the domestic Chinese markets prevented a further drop, underscored by the recent connection of the world’s largest solar farm in northwestern Xinjiang. Also limiting the decline, expectations that major central banks are due to cut key interest rates in upcoming decisions trimmed the opportunity cost to hold non-yielding bullion assets. The ECB and BoC are due to cut rates in their next meetings, while the Fed, BoE, and the PBoC are expected to lower borrowing costs in the third quarter.

Silver traded above 30 USD/t.oz

Silver rose above 30, according to trading on a contract for difference (CFD).

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Silver Price History

07.05.2024 - XAG Commodity was down 5.2%

  • Silver prices retreated from an 11-year high of $32 per ounce to $30.5 as the US imposed tariffs on Chinese solar cell imports, impacting silver demand in key industries and regions.
  • Strong domestic demand in China, particularly highlighted by the connection of the world's largest solar farm in Xinjiang, helped limit the decline in silver prices.
  • Expectations of major central banks cutting interest rates in upcoming decisions reduced the opportunity cost of holding non-yielding assets like silver, further influencing the market movement.
  • Despite briefly trading above $30, the overall bearish sentiment prevailed due to the combination of trade tensions, industrial demand concerns, and central bank rate cut expectations.

23.04.2024 - XAG Commodity was down 5.2%

  • Silver prices dipped as investors reassessed the Federal Reserve's monetary policy outlook, with some officials indicating a cautious approach towards rate cuts.
  • Profit-taking and mixed economic data from the US, including unexpected stalling in industrial production and surprising export and import prices, contributed to the downward pressure on silver prices.
  • Despite recent highs and a strong year-to-date performance, silver faced selling pressure as investors weighed the potential timing and extent of Fed rate reductions.
  • The bearish movement in silver today highlights the market's sensitivity to shifting monetary policy expectations and economic indicators, leading to a temporary pullback in prices.

12.03.2024 - XAG Commodity was up 5.0%

  • Silver surged above $29 per ounce to levels last seen in 2013, driven by increased safe-haven demand amid rising inflation pressures and geopolitical risks in the Middle East, as well as positive economic indicators from major economies like the US, Germany, and China.
  • The metal stabilized below $28 after hitting a multi-year high, as investors assessed the Fed's monetary policy outlook following mixed US economic data, with inflation rates coming in below expectations but still impacting expectations of future rate cuts.
  • Silver prices dropped below $28 in reaction to hotter-than-expected US CPI data, reducing market expectations for imminent Fed interest rate cuts, which diminished the appeal of non-yielding assets like silver.
  • Despite fluctuations, silver maintained a positive outlook, tracking the rally in gold and benefiting from increased consumer and industrial demand, particularly in sectors like chip and solar panel production, while also facing pressure from easing geopolitical tensions and shifting expectations regarding central bank policies.

22.02.2024 - XAG Commodity was down 5.0%

  • Silver prices fell today after reaching near-1-year highs, as investors reacted to the Fed's decision to maintain projections for interest rate cuts in 2024. This bearish movement can be attributed to profit-taking and a shift in sentiment towards non-yielding assets.
  • The decision by the Swiss National Bank to reduce its benchmark rate also added pressure on silver prices, as it signaled a potential easing cycle among major regulators.
  • Despite the bearish movement, silver's overall upward trend in recent weeks and months can be attributed to factors such as rising geopolitical tensions, an improved industrial outlook in China, and safe-haven demand amid increased war and inflation risks.
  • Investors will continue to monitor central bank policy meetings and geopolitical developments for cues on the future direction of silver prices.

20.02.2024 - XAG Commodity was up 2.3%

  • Silver prices surged above $25 per ounce due to the Federal Reserve's decision to maintain rates at a 23-year high, increasing investor confidence in the metal's safe-haven appeal.
  • Geopolitical tensions and an improved industrial outlook from China also contributed to silver's rally, despite cautious market sentiment ahead of major central bank policy meetings.
  • The metal's upward trend was driven by rising war and inflation risks, leading investors to seek refuge in precious metals like silver in light of global uncertainties.
  • Despite a slight dip following strong US economic data, such as a higher-than-expected Producer Price Index and lower unemployment claims, silver continued its climb, demonstrating resilience amid evolving market conditions.

29.01.2024 - XAG Commodity was up 1.2%

  • Silver prices saw a bullish movement despite being at their lowest in two weeks, indicating a potential buying opportunity for investors.
  • The cautious market sentiment, driven by anticipation of key inflation readings and Federal Reserve officials' remarks on policy, likely contributed to the fluctuation in silver prices.
  • The slight dip in US GDP growth and revised projections for Fed interest rate reductions may have also influenced investors to turn to silver as a hedge against inflation and economic uncertainty.
  • Overall, the bullish movement in silver prices amidst market volatility suggests that investors are seeking safe-haven assets like precious metals in response to economic indicators and central bank policies.

13.01.2024 - XAG Commodity was down 1.7%

  • 1. Uncertainty around upcoming inflation and economic releases has generated caution among investors, resulting in a downward movement in silver prices.
  • 2. The possibility of reduced inflation in January and potential monetary easing has lowered the opportunity cost of holding non-yielding assets like silver.
  • 3. Waning optimism regarding rate reductions by the Federal Reserve, combined with robust US jobs and services data, has diminished the appeal of non-yielding assets, including silver.
  • 4. Nonetheless, silver finds some relief from expectations of additional support from authorities in China, the leading consumer of silver, and projected increased demand in the industrial sector.

14.10.2023 - XAG Commodity was up 5.3%

  • Today, silver experienced a strong bullish movement, with prices rising from a 1-month low. This can be attributed to the following factors:
  • Fresh inflation report from the US: Lower-than-expected inflation rates in October reinforced beliefs that the Federal Reserve would refrain from further rate hikes and could start monetary easing, increasing the appeal of silver as a hedge against inflation.
  • US debt issues: Moody's lowering of the US credit rating outlook from stable to negative, along with increased fiscal deficits and political standoffs in Washington, provided some relief for silver prices.
  • Recovery concerns in China: Weak economic data in China clouded the impact of the latest stimulus measures, leading to increased demand for safe-haven assets like silver.
  • Overall market sentiment: The bullish movement in silver may also be influenced by eased Middle East tensions and mixed China data, which contributed to a broader risk-off sentiment and increased demand for safe-haven assets.

30.08.2023 - XAG Commodity was down 5.5%

  • Silver prices hit a 6-week low, indicating a bearish market movement.
  • The decline in silver prices can be attributed to several factors, including the Federal Reserve's hawkish pause, potential U.S. government shutdown, and concerns about industrial demand due to a slowing Chinese economy.
  • The surging bond yields and a stronger dollar have also contributed to the decline in silver prices, as they have diminished the metal's appeal.
  • Despite the bearish movement, tight supply and the increasing demand for solar panel technologies have provided some support to the commodity.
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Disclaimer
Morpher is not liable for the content of the AI investment insights. Like most GPT-powered tools, these summaries may contain AI hallucinations and inaccurate information. Morpher is not presenting you with any investment advice. All investments involve risk, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. These summaries do not constitute investment advice.