This Friday (September 13), during the European trading session, silver prices surged strongly, breaking key technical levels and reaching above $29. This rise was mainly driven by the possibility of a Fed rate cut, with traders increasingly betting that the Fed will cut rates by 50 basis points soon.
Along with the weakening of the dollar, silver's appeal to international investors has significantly increased. The dollar index fell to a yearly low, prompting investors to seek alternative safe-haven assets, including commodities like silver. Speculation on the extent of the Fed's rate cut rose from 28% to 41%, intensifying the buying interest in silver.
Additionally, geopolitical tensions have also been a major factor driving up silver prices, with the market's demand for safe-haven assets such as gold and silver increasing. However, weak demand in the Asian market continues to pressure silver prices, especially as retail buyers in China and India have reduced their purchases due to high prices.
Technical analysis shows that silver still has room to rise in the short term, but overbought signals should be noted. Technical indicators suggest that the market might experience a pullback, with prices seeking support around $29.60 or possibly falling back to $29.18.
Nevertheless, the overall bullish sentiment in the market remains intact. If the Fed's rate cut is more substantial than expected, silver could test higher resistance levels and further climb above $31.76, potentially challenging the target price range of $33-35 in the long term.
