- Silver surges toward $32.50 as the US Dollar weakens.
- Mounting concerns over the US economy keep pressure on the Greenback.
- Investors anticipate US CPI data for insights into the interest rate outlook.
Silver (XAG/USD) surged sharply to near $32.50 during Tuesday’s European session, driven by a significant sell-off in the US Dollar (USD). Investor concerns over the United States (US) economic outlook, fueled by President Donald Trump’s tariff policies, have pressured the Greenback. The US Dollar Index (DXY), which measures the currency against six major counterparts, fell to a four-month low of approximately 103.35. A weaker US Dollar makes precious metals like Silver more appealing to investors.
Market sentiment remains cautious as fears grow that Trump’s trade policies could lead to an economic slowdown. On Friday, the former president stated, “There is a period of transition because what we are doing is very big.” Historically, transitional economic phases often bring short-term instability, which, in turn, boosts safe-haven demand for assets like Silver.
Investors are now awaiting the release of the US Consumer Price Index (CPI) data for February, scheduled for Wednesday. This inflation report is expected to influence market speculation regarding the Federal Reserve’s (Fed) monetary policy trajectory. Forecasts indicate that inflation may have eased, increasing the likelihood of a Fed rate cut in May. The CME FedWatch tool shows that the probability of a rate reduction has climbed to 51%, up from 37% just a day earlier. A lower interest rate environment typically benefits non-yielding assets like Silver.
Silver Technical Analysis
Silver is eyeing a retest of the key resistance level at $33.40, which corresponds to the February 14 high. The 20-day Exponential Moving Average (EMA), positioned near $32.07, continues to act as strong support for the metal.
The 14-day Relative Strength Index (RSI) remains within the 40.00-60.00 range, signaling a neutral trend with no clear bullish or bearish dominance.
To the downside, Silver finds strong support around $30.00, aligning with the upward-sloping trendline from the August 8 low of $26.45. Meanwhile, the next major resistance level stands at $34.87, marked by the October 22 high.
