Silver Price Forecast: XAG/USD jumps to near $31 as traders raise Fed dovish bets

• Silver price climbs to near $31.00 as traders reassess Fed monetary policy outlook after mixed US inflation data.
• Traders expect the Fed to cut interest rates twice this year.
• Silver price attempts to break above the upward-sloping trendline around $30.85.

Silver price (XAG/USD) moves higher to near $31.00 in Thursday’s European session. The white metal gains as traders have raised bets supporting the Federal Reserve (Fed) to deliver more than one interest rate cut this year.

According to the CME FedWatch tool, traders are pricing in two interest rate cuts this year, the first coming in June instead of September, as forecasted before the December inflation data were released.

As measured by the Consumer Price Index (CPI), headline inflation accelerated to 2.9%, as expected; however, the core reading—which excludes volatile food and energy prices—surprisingly rose at a slower pace of 3.2%.

Typically, signs of acceleration in Fed dovish bets bode well for non-yielding assets, such as Silver.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks higher to near 109.00 but has corrected from the two-year high of 110.00. 10-year US Treasury yields edge higher to near 4.66% but have come down from its yearly high of 4.80%.

Silver technical analysis

Silver price gathers strength to break above the upward-sloping trendline around $30.85, which is plotted from the 29 February 2024 low of $22.30 on a daily timeframe.

The white metal rebounded strongly after discovering strong buying interest near the 200-day Exponential Moving Average (EMA), which is around $29.45. It then climbed above the 20-day EMA, which is around $30.00, suggesting a bullish near-term trend.

The 14-day Relative Strength Index (RSI) jumps to near 60.00. A fresh bullish momentum would trigger if its manages to break above 60.00.

Silver daily chart