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Silver price (XAG\/USD) struggles to gain ground above the crucial support of $29.00 in Thursday\u2019s early European session. The white metal weakens as the Federal Reserve\u2019s (Fed) dot plot of the June meeting has indicated that policymakers see only one rate cut this year. A few policymakers also advocated for maintaining the current interest rate framework for the entire year as they are less confident about inflation declining to the desired rate of 2%.<\/p>\n
The appeal for precious metals remains vulnerable even though Fed Chair Jerome Powell acknowledged that there is a slower progress in the disinflation process and the Consumer Price Index (CPI) data for May was cooler than expected.<\/p>\n
Meanwhile, the US Dollar Index<\/a> (DXY) has extended its recovery to 104.80 and 10-year US Treasury yields bounce back to 4.33% albeit the CME FedWatch tool shows that traders hold their bets for the Fed<\/a> to reduce interest rates in the September meeting. Higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets such as Silver.<\/p>\n Going forward, investors will focus on the US Producer Price Index<\/a> (PPI) data for May, which will be published at 12:30 GMT. Annual headline PPI is estimated to have accelerated to 2.5% from 2.2% in April, with core reading growing steadily by 2.4%.<\/p>\n Silver price will likely deliver a breakdown of the neckline of the Head and Shoulder (H&S) chart<\/a> pattern, which is marked from May 24 low at $30.00 on a four-hour timeframe. A breakdown of the above-mentioned chart pattern results in a bearish reversal.<\/p>\n The near-term outlook remains uncertain as 20 and 50-day Exponential Moving Averages (EMAs) near $29.50 and $29.90, respectively, are declining.<\/p>\n The 14-period Relative Strength Index (RSI) hovers near 40.00. A bearish momentum would trigger if it breaks below the same.<\/p>\nSilver technical analysis<\/h2>\n
Silver four-hour chart<\/h3>\n