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Silver price (XAG/USD) trades inside Monday’s trading range near $31.00 in Tuesday’s Asian session. The white metal exhibits sheer strength as a rate cut by the Federal Reserve (Fed) in September appears to be a done deal.The CME FedWatch tool shows that traders see a 77% chance for rate cuts in September, which has increased from 65.6% recorded a week ago. The reasoning behind growing speculation for rate cuts is moderating United States (US) labor market conditions.The US Nonfarm Payrolls (NFP) report for June showed that the Unemployment Rate rose to 4.1%, the highest in more than two years. Also, Average Hourly Earnings declined expectedly, which eases fears of inflation remaining stubborn as slower growth in purchasing power would keep a lid over consumer spending.Increasing expectations for Fed rate cuts in September have limited the upside in the US Dollar (USD) and Treasury yields. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, remains on backfoot around three-week low near 104.85. 10-year US Treasury yields struggle to hold weekly support of 4.28%. Falling yields on interest-bearing assets reduces the opportunity cost of holding an investment in non-yielding assets, such as Silver.
Silver technical analysis
Silver price extends its upside to near $31.00 after a breakout of the Falling Channel formation on a four-hour timeframe. An upside break of the above-mentioned chart pattern results in a bullish reversal. Upward-sloping 20-day Exponential Moving Average (EMA) at $30.70, exhibits a bullish trend.The 14-period Relative Strength Index (RSI) shifts into the bullish range of 60.00-80.00, indicating that momentum has shifted to the upside.
Silver four-hour chart
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