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Powell's dovish remarks hit the dollar, and tensions in the Middle East further escalated! Analysts: Silver prices are aiming at the 30 mark

2024-08-01

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On Wednesday (July 31), spot silver surged more than 2% as Fed Chairman Powell's dovish remarks hit the dollar and tensions in the Middle East further escalated. FXStreet analyst Christian Borjon Valencia wrote a new article to analyze the technical trend of silver prices.

Valencia wrote that silver prices resumed their upward trend on Wednesday, soaring more than 2% and breaking through the 100-day moving average (DMA) of $28.58/oz, which was a key resistance level.

Spot silver closed up 2.15% at $28.98/oz on Wednesday.

The Federal Reserve ended its two-day monetary policy meeting on Wednesday. The Federal Open Market Committee (FOMC) voted unanimously to keep the benchmark federal funds rate unchanged in the range of 5.25% to 5.5%, and reiterated that it would cut interest rates after confidence in cooling inflation increased.

Fed Chairman Powell said at a press conference that the second-quarter inflation data increased the Fed's confidence and made "some further progress" in achieving the 2% inflation target. If the inflation test is met, the Fed may cut interest rates as early as September.

The ICE dollar index closed down 0.4% at 104.06 on Wednesday.

In terms of the situation in the Middle East, the New York Times reported on Wednesday that three Iranian officials said that Iran's Supreme Leader Ayatollah Ali Khamenei has ordered Iran to directly strike Israel in retaliation for the killing of Hamas leader Haniyeh in Tehran. Iran and Hamas accused Israel of carrying out the assassination.

The report pointed out that three Iranian officials, including two members of the Revolutionary Guard, said that Khamenei issued the order at an emergency meeting of Iran's Supreme National Security Council on Wednesday morning. Shortly before that, Iran announced that Haniyeh had been shot dead.

How will the silver price go next?

Valencia wrote that silver's uptrend is still in play, with the relative strength index (RSI) showing increasing bullish momentum, with next targets including $29.44/oz and $30.00/oz.

As shown by the RSI, buyers have gathered some momentum. Although the index is still below the neutral line, it has seen a sharp rise, suggesting that it will turn bullish and confirm the price action.

If silver prices hold above $29.00/oz, the next target will be the July 24 high of $29.44/oz, followed by the 50-day moving average (DMA) of $29.89/oz. Once silver prices break above $30.00/oz, further gains are expected.

On the other hand, if silver prices fall below the 100-day moving average of $28.58/oz, the next support will be the July 29 low of $27.31/oz, followed by $27.00/oz, Valencia added.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Powell's dovish remarks hit the dollar, and tensions in the Middle East further escalated! Analysts: Silver prices are aiming at the 30 mark

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