At Extreme Investor Network, we aim to provide our readers with unique and valuable information on the stock market, trading, and all things related to Wall Street. In this blog post, we will delve into the recent performance of silver (XAG/USD) and explore the forces behind its recent slump.
One of the key factors contributing to silver’s recent decline is the U.S. economic data released on Friday, which showed modest price increases in June. This data has fueled optimism for potential Federal Reserve interest rate cuts, leading to falling U.S. Treasury yields. Typically, lower interest rates support precious metals prices, including silver, as they reduce the opportunity cost of holding non-yielding assets.
Despite the bearish trend, there are some glimmers of hope for silver demand. India, the world’s second-largest consumer of precious metals, recently reduced import duties on gold and silver. This action has resulted in a surge in gold premiums to decade-highs and could potentially boost silver demand as well. However, it’s important to note that increased gold demand doesn’t always translate to higher silver prices, as other market factors come into play.
Looking ahead, the short-term outlook for silver remains bearish. The break below key support levels and continued downward momentum suggest further potential for decline. Traders should keep a close eye on the crucial 50% support level at $27.22, as a failure to hold this level could accelerate the sell-off.
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