Forex News
- Silver breaks below the 50-day SMA, confirming bearish technical pressure.
- RSI points lower, signaling sellers are gaining downside momentum.
- Break below $73.09 exposes $70.87 and the 200-day SMA support.
Silver (XAG/USD) price drops nearly 2.80% on Wednesday as it breaks the 50-day Simple Moving Average (SMA) at $75.77, which opened the door to clear the $75.00 mark. At the time of writing, XAG/USD trades at $74.74, after reaching a daily low of $73.44.
XAG/USD Price Forecast: Technical outlook
The white metal is poised to consolidate further below an ascending channel's upslope support trendline and beneath the 50-day SMA. In addition to this, breaching the $75.00 psychological level cleared the way for a move lower.
The Relative Strength Index (RSI) turned bearish in mid-May, pointing downwards, suggesting sellers are gaining momentum.
Should Silver slip below the May 19 low of $73.09, the next stop would be the April 29 low of $70.86. Below this level lies the 200-day SMA at $65.59, ahead of the yearly low of $61.02.
Above, the first resistance for XAG/USD is $75.00, followed by the 50-day SMA at $76.00. If hurdled, the next stop would be the 20-day SMA at $77.61.
XAG/USD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
TD Securities analysts highlight that United States (US) consumer confidence from the Conference Board slipped only marginally in May and continues to outperform other sentiment gauges. They note, however, that persistent conflict in Iran and elevated gasoline prices are likely to weigh on confidence ahead, with survey details showing weaker buying plans, a softer labour differential and respondents increasingly focused on prices, Oil and geopolitical risks.
Consumer sentiment diverges but may soften
"Consumer confidence continues its trend of upside surprises, declining only slightly to 93.1 in May from an upwardly revised 93.8 in April (TD: 90.5, cons: 92.0). The Conference Board's measure of consumer confidence has diverged in recent months from both UMich and Morning Consult. We believe that as the Iran conflict persists and gasoline prices remain high, consumer confidence is likely to eventually move lower."
"Consumers' assessment of the labor market in May continued back on its downtrend, with the labor differential declining to 6.9. This is in line with the declining job finding expectations in the NY Fed survey as well."
"Buying plans in the report moved lower while inflation expectations remained high. Despite the more modest decline in the headline, the Iran shock is being felt by consumers."
"According to the Conference Board, "Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism in May. References to prices and oil and gas increased in frequency for a second consecutive month, while mentions of war, geopolitics, and conflict remained elevated—likely signaling consumers’ underlying concerns about the inflationary impacts of the war in the Middle East on their wallets.""
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- The US Dollar Index rebounds as conflicting signals surrounding US-Iran negotiations limit downside pressure on the Greenback.
- The White House rejects Iranian state media reports of a draft US-Iran agreement.
- Traders await the US PCE inflation report due on Thursday for fresh clues on inflation trends and the Fed’s interest rate path.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, reverses earlier losses on Wednesday as traders digest the latest developments surrounding US-Iran negotiations. At the time of writing, the index is trading around 99.25 after rebounding from an intraday low near 98.97.
Earlier in the day, the US Dollar came under pressure after Iran’s State TV reported that Tehran and Washington had prepared an initial unofficial framework for a memorandum of understanding (MOU). However, sentiment later shifted after the United States rejected the Iranian media reports, calling the alleged interim peace deal draft “a complete fabrication.”
While diplomatic talks between Washington and Tehran remain ongoing, recent developments suggest progress may be slower than markets had initially anticipated earlier this week after reports indicated both sides were moving closer toward a potential agreement that could eventually lead to the reopening of the Strait of Hormuz.
Adding to the cautious tone, US President Donald Trump said on Wednesday, “We’re not there yet on an Iran deal. We’re not satisfied with it,” while also warning, “Maybe we go back and finish it, maybe we don’t.” Separately, Trump told PBS News that Iran would not receive sanctions relief in exchange for giving up highly enriched uranium.
Meanwhile, US Secretary of State Marco Rubio said, “I think there has been progress towards an agreement. We’ll see in the next few hours, days.” Rubio added, “Trump’s preference is to negotiate with Iran. We continue to work on Iran diplomacy.”
Despite signs of diplomatic engagement, traders remain skeptical that a final agreement can be reached in the near term, keeping pullbacks in the US Dollar limited.
Against this backdrop, the Greenback also continues to draw support from a hawkish Federal Reserve (Fed) outlook. Although crude Oil prices have eased from recent highs, they remain well above pre-war levels, while the broader US macroeconomic backdrop continues to reflect resilient growth. As a result, markets expect the Fed to remain patient before shifting back toward policy easing and to keep interest rates on hold for the foreseeable future.
Traders now await upcoming US Personal Consumption Expenditures (PCE) data due on Thursday and speeches from several Fed officials later this week for fresh clues on the interest rate path.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
US President Donald Trump said on Wednesday that the US is not easing sanctions on Iran and that the US would not unfreeze Iranian assets. He added that he is “not comfortable with Russia or China taking Iran’s stockpile of highly enriched uranium.”
Regarding the Strait of Hormuz, he said that it would be open to everyone, that no one would control it and that it would be open immediately.
Trump commented that the US-Iran deal has to be perfect and that there’s an understanding with Iran.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.17% | 0.16% | 0.17% | 0.49% | -0.95% | 0.19% | |
| EUR | -0.07% | 0.10% | 0.09% | 0.09% | 0.38% | -1.02% | 0.12% | |
| GBP | -0.17% | -0.10% | -0.02% | -0.01% | 0.30% | -1.11% | 0.03% | |
| JPY | -0.16% | -0.09% | 0.02% | 0.00% | 0.31% | -1.10% | 0.05% | |
| CAD | -0.17% | -0.09% | 0.01% | -0.01% | 0.30% | -1.09% | 0.04% | |
| AUD | -0.49% | -0.38% | -0.30% | -0.31% | -0.30% | -1.39% | -0.23% | |
| NZD | 0.95% | 1.02% | 1.11% | 1.10% | 1.09% | 1.39% | 1.14% | |
| CHF | -0.19% | -0.12% | -0.03% | -0.05% | -0.04% | 0.23% | -1.14% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
BNY’s Geoff Yu highlights strong flows into EM food producers as supply disruptions through the Strait of Hormuz and higher fertilizer and energy costs push food prices up policymakers’ agendas. Australia, Brazil and Argentina are seen benefiting via commodity exports, though BNY warns that government intervention and price caps could limit margin expansion in staples.
Food inflation supports EM staples flows
"Even if a settlement is reached – and the Strait of Hormuz reopens – certain supply challenges will continue to affect global headline inflation through the rest of the year. The implications for policymaking and asset allocation are substantial."
"Food prices are moving swiftly up the agenda: According to the Center for Strategic and International Studies, 20%–30% of global fertilizer exports transited the Strait of Hormuz prior to the conflict. The region also produces significant amounts of energy byproducts used in fertilizer production elsewhere, all of which transit the Strait of Hormuz."
"Climate pressures in the coming months are also expected to raise food production costs, with knock-on effects on supply and final prices. In its rate hike last month, the Philippine central bank noted that “higher global oil and fertilizer prices have begun feeding through to domestic fuel and food prices.” We expect to hear similar statements across EM, where food insecurity is more acute."
"The conflict has mostly generated positive terms of trade shocks for “geographically unexposed” energy exporters, but we expect food and soft commodities to begin performing as well. For economies such as Australia and Brazil, whose export baskets comprise both groups, industrial commodities and energy will drive the bulk of adjustment."
"If global inflation continues to pick up, the staples sector is expected to benefit in a defensive sense. That said, the risk of government intervention is high – see the recent U.K. initiative asking supermarkets for voluntary price caps – and margin expansion should not be assumed."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Trump rejects sanctions relief unless Tehran gives up uranium.
- Hawkish central banks deepen pressure on non-yielding Gold.
- Traders await GDP, jobs data and Core PCE inflation.
Gold (XAU/USD) plungesmore than 1% on Wednesday as the Greenback recovers some ground, pairing some of its earlier losses, while risk appetite shifted to neutral amid speculation that US-Iran negotiations could stall. At the time of writing, XAU/USD trades at $4,443, its lowest level since March 30.
XAU/USD slides as Iran deal doubts revive Dollar demand
The US Dollar is recovering some ground as US President Donald Trump toughens his posture on Iran. Trump said that there wouldn’t be sanctions relief on Iran unless they agree to give up uranium. He added that Iran wants to make a deal, but the US is not satisfied with it.
Earlier, the White House denied Iran’s state TV report that had revealed the contents of a draft sent to US negotiators.
The US Dollar Index (DXY), which measures the performance of the buck’s value against six currencies, shifted positively in the day, up 0.06% at 99.20, a headwind for the yellow metal.
Major central banks shifting hawkishly could be one reason for Gold’s downturn. The Reserve Bank of New Zealand (RBNZ) delivered a hawkish hold, with forward guidance suggesting they’re open to raising rates due to the impact of the energy shock sparked by the Middle East conflict.
Investors priced in Fed hawkish bets
The US economic docket featured Federal Reserve (Fed) officials, led by Minneapolis Fed President Neel Kashkari. He said that the balance of risks to the dual mandate suggests focusing on inflation. He added that it is too soon to predict the timing of Fed action.
Money markets have priced in a nearly 50% chance that the Federal Reserve, now led by Kevin Warsh, would hike rates towards the end of the year, according to Prime Terminal data.
On the data front, the ADP Employment Change four-week average eased to 35.75K from a revised 40.75K, though it continued to point to underlying resilience in the labor market.
This week, the US economic calendar includes Durable Goods Orders, jobs data, GDP figures, and the Fed’s preferred inflation indicator, the Core PCE Price Index.
XAU/USD technical analysis: Gold extends losses below $4,500, eyes on $4,400
Price action depicts Gold is poised to extend its losses after reaching a two-month low of $4,401, before recovering some ground. The Relative Strength Index (RSI) is falling deep into bearish territory but is still above the oversold area. This suggests that sellers are in charge, opening the door for further losses.
The first support for XAU/USD is $4,400. A breach of the latter will expose the March 23 cycle low of $4,098, ahead of the $4,000 milestone.
Upwards, the first area of interest would be $4,500. Once hurdled, the next stop would be the $4,550 psychological level. Breaking through this could lead to the $4,600 level and eventually challenge the 50-day Simple Moving Average (SMA) at $4,636.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Commerzbank’s commodity team, led by Barbara Lambrecht and colleagues, argues that Brent has fallen back below USD 100 as markets price in a potential Iran deal, but a rapid normalization of Gulf exports is unlikely. Mine clearance, infrastructure damage and tanker capacity imply a staggered recovery, while US WTI-driven drilling remains too modest to trigger a strong production response in coming months.
Gulf normalization and US shale response
"Hopes for a framework agreement between the US and Iran to end the conflict have been somewhat dampened by the recent US strikes on Iranian missile sites and vessels that were allegedly attempting to lay mines in the Strait of Hormuz. Nevertheless, confidence remains high among market participants."
"Consequently, a barrel of Brent crude is trading below USD 100 again, costing a good 10% less than it did just a week ago."
"According to the IEA, the market will not return to equilibrium before the end of the fourth quarter."
"This is also in line with the forecast by the US Energy Information Administration, which expects production to stagnate at current levels in the coming months."
"The recent rise in drilling activity does not point to a significant expansion of US oil production."
"For that to happen, the number of oil rigs would have to increase much more substantially."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Scotiabank’s strategists Shaun Osborne and Eric Theoret highlight the New Zealand Dollar (NZD) as a notable G10 outperformer, supported by a hawkish hold from the Reserve Bank of New Zealand (RBNZ). They note the decision was finely balanced and decided by the Governor’s vote, with forecasts incorporating at least two 25 bp hikes this year due to concerns over broader energy-related inflation, while AUD/NZD has reversed sharply from multi-year highs.
Hawkish hold underpins NZD strength
"The pro-risk, growth-sensitive, and high-beta NZD and SEK are showing notable strength while movement among the remaining G10 currencies remains relatively limited with most trading close to flat vs. the USD."
"The NZD’s gains are fundamentally driven, as market participants reassess their outlook for the RBNZ in the aftermath of the latest policy decision in which a hawkish hold was finely balanced and resolved by the Governor’s decisive vote."
"The RBNZ’s forecast incorporated at least two 25 bp hikes by the end of the year, driven by concerns related to a potential broadening of energy-related inflation."
"The AUD/NZD cross is down significantly, with a 1.2% drop on the day, delivering a clear bearish reversal from a multi-year high following a rally that had climbed to levels last seen in 2013."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Royal Bank of Canada (RBC) economists Nathan Janzen and Annie Zheng highlight that Canada’s current high unemployment rate is masking longer-term labour supply challenges. They note retirements have surged and will stay elevated into the 2030s, while the under‑35 workforce is set to shrink without immigration. The available workforce is projected to contract relative to population by 2026, tightening labour conditions over time.
Retirements and demographics tighten supply
"A high unemployment rate means labour shortages are less of an issue for Canada right now than in the past, but under the surface longer-run structural labour supply headwinds continue to build."
"Monthly retirements have nearly doubled to roughly 25,500 per month, and will remain elevated into the 2030s."
"At the same time, the population of potential workers under 35 currently in Canada (i.e. without immigration) would decline by about 186,000 per year over the next five years."
"As a rising share of the population hits retirement age, the size of the available workforce will decline more than the population for the first time on record outside of the pandemic in 2026."
"But, challenges tied to a shrinking supply of new workers will build as per-worker labour markets conditions improve (i.e. the unemployment rate declines)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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