Silver prices have risen above $29.00 as pressure on US bond yields has led to speculation that the Federal Reserve will cut interest rates. The 10-year US Treasury yields have dropped to around 4.20%, reducing the opportunity cost of holding investments in non-yielding assets like Silver. Market expectations for rate cuts in September have climbed to 71%, with traders pricing in two rate cuts this year.
The decline in US consumer and producer inflation in May, partly due to soft gasoline prices, has contributed to the increased likelihood of rate cuts. The CME FedWatch Tool also indicates that there could be two rate cuts this year, higher than the one signaled by Fed policymakers. The US Dollar Index has risen to 105.70, showing strength in the Greenback.
Technically, Silver price is trading within a Falling Channel pattern, with each pullback seen as a selling opportunity by traders. The asset has fallen below the 200-period Exponential Moving Average, indicating a bearish trend. The 14-period Relative Strength Index suggests consolidation ahead.
Overall, Silver price is supported by lower US bond yields and expectations of rate cuts by the Federal Reserve. The technical setup shows a bearish trend, but consolidation could be seen in the near future. Traders will closely monitor US economic data and Fed statements for further clues on the direction of Silver prices.
