The stability of the US dollar has indirectly supported silver, especially as it retreated from recent highs. Fluctuations in the dollar can have a direct impact on silver prices, as a stronger dollar tends to weigh on commodities priced in dollars. However, the dollar’s recent stability, coupled with the upcoming US election uncertainties and expectations of a Fed rate cut, have helped maintain silver’s appeal among investors looking for safe-haven assets.
The Federal Reserve’s interest rate decision and economic data in pictures
Market participants are eagerly awaiting the Federal Reserve’s November 7 interest rate decision, with a 97% probability of a 25 basis point cut priced in, according to CME’s FedWatch Tool. Economic indicators coming out this week, such as job openings, employment data from ADP and the PCE core price index, could influence the Fed’s tone. Should the data support rate cuts, this could prove beneficial for silver by lowering the opportunity cost of holding non-performing assets, further increasing silver’s hedging potential against economic uncertainty.
Silver market forecast
The near-term outlook for silver is cautiously bullish as prices rise. However, the resistance levels at $34.35 and $34.87 remain significant barriers. If it rises above these values, silver could be on track to test the critical $35.40 level. If silver fails to reach these levels, it risks a retracement towards $33.08, with the next support at $32.49 in sight. Traders should keep a close eye on the dollar, Treasury yields and economic data as these are likely to influence silver prices through the end of the year.