Silver (XAG/USD) prices pulled back from recent highs on Tuesday, as the US Dollar (USD) rebounded following stronger-than-expected US Retail Sales data for June. However, the white metal managed to hold above $30.50, supported by persistent expectations of Federal Reserve (Fed) rate cuts in September.
Retail Sales Data Boosts USD, But Disinflationary Trend Persists
While monthly retail sales remained flat in June, the upward revision of May’s figure and a robust performance in the Retail Sales Control Group strengthened the US Dollar’s appeal. However, the underlying trend of easing inflation remains intact, as evidenced by the recent Consumer Price Index (CPI) report.
Fed Rate Cut Expectations Support Silver
Market participants continue to anticipate Fed rate cuts starting in September, fueled by the recent deceleration in consumer inflation. This expectation has helped maintain silver’s overall bullish sentiment, despite the temporary setback caused by the stronger USD.
Silver Technical Analysis: Sideways Consolidation in Tight Range
Silver prices have been consolidating within a narrow range of $30.40-$30.80 for over a week. The near-term outlook remains positive, as the precious metal holds above the breakout level of a Falling Channel formation on the 4-hour chart.
The 50-period Exponential Moving Average (EMA) near $30.70 continues to act as a key support level, while the 14-period Relative Strength Index (RSI) oscillates within the neutral range, indicating indecision among market participants.
Key Points:
- Silver prices retreat as US Retail Sales data beats expectations.
- Stronger USD exerts pressure on silver, but Fed rate cut hopes remain.
- Silver consolidates within a tight range, with the near-term outlook still bullish.
- Key levels to watch: $30.40 support, $30.80 resistance, and 50-period EMA at $30.70.
