Silver Price Forecast: XAG/USD advances on soft US economic data, dovish ECB tilt

• US retail sales in June and core retail sales fell short of estimates, while industrial production significantly declined, indicating weakness in the US economy.”
• The dovish tilt from ECB member Klas Knot suggests a potential halt in the ECB’s tightening cycle, providing a bullish backdrop for Silver.
• US Treasury bond yields remained largely unchanged, with the 2-year Treasury note yielding 4.764% and the 10-year benchmark note at 3.789%.

Silver price advances as the Asian session begins, reclaiming the $25.00 figure, bolstered by soft economic data from the United States (US) and weaker inflation reports in Canada. That, alongside a ‘dovish’ tilt of European Central Bank (ECB) member Klas Knot, opened the door for the ECB to halt its tightening cycle. The XAG/USD exchanges hands at $25.06  troy ounce, gaining 0.01%.

XAG/USD reclaims $25.00 mark amid dovish signals and underwhelming US Retail Sales figures

In June, US Retail Sales saw a month-on-month increase of 0.2%, falling short of the estimated growth rate of 0.5%. When excluding automobile sales, the core retail sales figures also missed forecasts, with a modest 0.2% increase compared to the anticipated 0.3%. Other data released by the US Federal Reserve (Fed) revealed a significant decline in Industrial Production, flashing further weakness in the US economy. Monthly figures indicated a slide of -0.5% compared to the previous month, below the estimated 0% growth. Annually, market participants had projected a 1.1% expansion, but the data from June showed a decline of -0.4%.

In response to the data release, the XAG/USD jumped to its daily high of $25.17 before reversing its course, with Silver’s finishing the session with a close of $25.05. The US Dollar Index (DXY), which measures the dollar against a basket of other major currencies, currently stands at 99.817, representing a decrease of 0.07%.

Furthermore, US Treasury bond yields waved during the day, with the 2-year Treasury note yielding 4.764%, almost unchanged. The 10-year benchmark note is 3.789%, unchanged.

On the Canadian front, inflation data came softer than expected, while the ECB’s ‘dovish’ tilt by the ex-uber hawk Klas Knot suggested that “risks of perhaps doing too much, needs to be paid more attention to.”

XAG/USD Price Analysis: Technical outlook

Silver’s daily chart portrays the white metal as upward biased, but its gains could be capped around the May 11 high of $25.47, which could be tested soon. Even though the Relative Strength Index (RSI) is about to enter overbought conditions, XAG/USD might test the previously mentioned level, which, once breached, could send XAG/USD rallying toward $26.00. Otherwise, if Silver can’t surpass $25.00, XAG/USD’s immediate support would be the June 9 high at $24.52 before diving to $24.00.