Published on Jun 14, 2023

Daily Analysis For Silver (XAG/USD) 14-06-2023

Sliver (XAG/USD) Analysis

Key Points: -

· The price of silver is steadily advancing towards the $24.00 level, supported by the US Dollar Index reaching a new intraday low of 103.21.

· Further downward movement is anticipated as a neutral policy stance from the Federal Reserve (Fed) would reduce the policy divergence between the Fed and other central banks.

· Silver experienced a strong buying response after a failed attempt to break below the Rising Channel pattern.

Today's Scenario: -

The price of silver (XAG/USD) has surpassed the immediate resistance level of $23.86 and is now edging closer to the $24.00 barrier during the European session. The strength in silver can be attributed to market expectations of a forthcoming announcement by the Federal Reserve (Fed) regarding a neutral interest rate policy.

During the European session, S&P 500 futures have recorded gains as hopes of additional interest rate hikes by the Fed have diminished. The market participants' risk appetite remains robust, leading to increased demand for assets perceived as risky.

The US Dollar Index (DXY) has reached a new daily low at 103.21. Further downside movement is anticipated if Fed Chair Jerome Powell confirms a neutral policy stance, as this would reduce the policy divergence between the Fed and other central banks. Additionally, the yields on 10-year US Treasury bonds have significantly declined below 3.81%.

While a neutral interest rate policy is widely expected, there is speculation that the dot plot, which reflects the projections of individual Fed policymakers, may remain hawkish. Despite signs of softening inflation in the United States and some easing in labor market conditions, the current employment situation remains resilient, and inflationary pressures persist above the desired rate. Fed policymakers would need to make significant efforts to effectively address inflation and bring it comfortably around 2%.

Diagram of XAG/USD (Silver): -

Economic Events: -

Date Event Impact Currency

02:00 (United States) API Crude Oil Stock Change Medium USD

04:15 (New Zealand) Current Account Medium NZD

05:30 (New Zealand) Food Inflation YoY Low NZD

10:00 (Netherlands) Balance of Trade Low EUR

10:30 (Finland) Inflation Rate YoY Low EUR

10:30 (Finland) Inflation Rate MoM Low EUR

10:30 (Finland) CPI Low EUR

11:30 (United Kingdom) GDP 3-Month Avg Medium GBP

11:30 (United Kingdom) Goods Trade Balance Non-EU High GBP

11:30 (United Kingdom) Balance of Trade Low GBP

11:30 (United Kingdom) Construction Output YoY Low GBP

11:30 (United Kingdom) Industrial Production YoY Low GBP

11:30 (United Kingdom) Industrial Production MoM Medium GBP

11:30 (United Kingdom) Manufacturing Production YoY Low GBP

11:30 (United Kingdom) Manufacturing Production MoM Medium GBP

11:30 (United Kingdom) Goods Trade Balance High GBP

11:30 (United Kingdom) GDP YoY Low GBP

11:30 (United Kingdom) GDP MoM High GBP

11:30 (Germany) Wholesale Prices MoM Medium EUR

11:30 (Germany) Wholesale Prices YoY Medium EUR

12:30 (China) FDI (YTD) YoY Medium CNY

12:30 (Slovakia) Inflation Rate MoM Low EUR

12:30 (Slovakia) Inflation Rate YoY Low EUR

12:30 (Slovakia) Core Inflation Rate MoM Low EUR

12:30 (Slovakia) Core Inflation Rate YoY Low EUR

12:30 (Slovakia) CPI Low EUR

13:30 (France) IEA Oil Market Report Medium EUR

14:30 (Euro Area) Industrial Production MoM Medium EUR

14:30 (Euro Area) Industrial Production YoY Low EUR

14:30 (Montenegro) GDP Growth Rate YoY Low EUR

15:00 (Germany) 10-Year Bund Auction Medium EUR

15:30 (Portugal) Inflation Rate MoM Low EUR

15:30 (Portugal) Inflation Rate YoY Low EUR

15:30 (Portugal) CPI Low EUR

15:30 (Ireland) Residential Property Prices YoY Low EUR

15:30 (Ireland) Residential Property Prices MoM Low EUR

16:30 (United States) MBA 30-Year Mortgage Rate Medium USD

16:30 (United States) MBA Mortgage Applications Low USD

16:30 (United States) MBA Mortgage Refinance Index Low USD

16:30 (United States) MBA Mortgage Market Index Low USD

16:30 (United States) MBA Purchase Index Low USD

17:00 (United Kingdom) NIESR Monthly GDP Tracker Low GBP

18:00 (Canada) New Motor Vehicle Sales Low CAD

18:00 (United States) Core PPI MoM Medium USD

18:00 (United States) Core PPI YoY Low USD

18:00 (United States) PPI YoY Low USD

18:00 (United States) PPI MoM High USD

20:00 (United States) EIA Heating Oil Stocks Change Low USD

20:00 (United States) EIA Refinery Crude Runs Change Low USD

20:00 (United States) EIA Crude Oil Stocks Change Medium USD

20:00 (United States) EIA Distillate Stocks Change Low USD

20:00 (United States) EIA Gasoline Production Change Low USD

20:00 (United States) EIA Crude Oil Imports Change Low USD

20:00 (United States) EIA Gasoline Stocks Change Medium USD

20:00 (United States) EIA Cushing Crude Oil Stocks Change Low USD

20:00 (United States) EIA Distillate Fuel Production Change Low USD

21:00 (United States) 17-Week Bill Auction Low USD

23:30 (United States) Fed Interest Rate Decision High USD

23:30 (United States) FOMC Economic Projections High USD

23:30 (United States) Interest Rate Projection - 1st Yr Medium USD

23:30 (United States) Interest Rate Projection - 2nd Yr Medium USD

23:30 (United States) Interest Rate Projection - Current Medium USD

23:30 (United States) Interest Rate Projection - Longer Medium USD

Buy Scenario: -

The immediate hurdle for the XAG/USD pair lies at the $24.00 mark, coinciding with the 38.2% Fibonacci retracement level. Any further upward movement could attract new sellers and encounter resistance near the $24.50-$24.55 supply zone, which aligns with the 50% Fibonacci retracement level. However, if a convincing breakthrough occurs, the XAG/USD pair may aim to reclaim the psychological level of $25.00 and continue its positive momentum towards the $25.35-$25.40 resistance zone. In such a scenario, bullish investors might make a fresh attempt to surpass the $26.00 round figure. Till we did not recommend buying Silver (XAG/USD).

Sell Scenario: -

The XAG/USD pair could face vulnerability, potentially leading to further downside below the monthly low around the $23.25 region. This could result in an accelerated decline towards the round figure of $23.00. If selling pressure continues, the next target would be the $22.70-$22.65 area, which represents a two-month low reached in May. Eventually, the commodity may test the $22.00 level. Till we do not advise selling silver (XAG/USD).