Silver Forecast: Traders eye $36.30 as potential starting point for silver rally
2025-07-01 21:51:16
On Tuesday (July 1), spot silver prices rose slightly, holding the key level of $36.30. Traders are assessing whether the recent small high of $36.84 can be broken.
Meanwhile, gold recovered to its 50-day moving average of $3,320.70 and tested the key retracement level of $3,347.97. This move was aided by a weaker dollar and lower U.S. Treasury yields, both of which continued to support buying of precious metals.
Trump puts pressure on rate cuts, Fed easing expectations rise
President Trump's aggressive push for a new tax cut and spending bill while threatening to significantly increase tariffs by July 9 has roiled markets and pushed the dollar index to its lowest level since early 2022.
The decline of the US dollar, which fell 0.64% against the Japanese yen and 0.33% against the Swiss franc, is increasing demand for metals in overseas markets.
U.S. Treasury yields also fell, with the 10-year Treasury yield falling to 4.195% and the 2-year yield falling to 3.709%. This reduces the opportunity cost of holding gold and silver, while stimulating traders' interest in safe-haven assets.
Goldman Sachs now expects the Federal Reserve to cut interest rates three times this year, a significant change from its previous forecast of just one rate cut.
The market focus has now turned to Wednesday's ADP employment data and Thursday's non-farm payrolls data to confirm whether the labor market may be weakening. If the data shows weakness, it may exacerbate the decline of the US dollar; if the US dollar and interest rates become more volatile, it will provide further support for silver.
If gold surges, can silver break through resistance?
If gold breaks above $3,348, it could trigger momentum towards $3,370, a scenario that could have a spillover effect on silver.
For silver, short-term upside resistance is the small high of $36.84. If it breaks through this level clearly, the next target will be $37.32.
However, failure to hold the key $36.30 level could trigger a sharp correction to the main support range of $35.40-34.87, which includes the recent low of $35.28. The 50-day moving average of $34.30 remains a key long-term support level, and a test of this level could attract buying.
Silver Market Forecast: Focus on the dollar, yields and US data
(Source of spot silver daily chart: Yihuitong)
Silver's short-term outlook remains closely tied to the weakness of the U.S. dollar and the trend of bond yields. The possibility of the Federal Reserve shifting to deeper rate cuts, coupled with U.S. fiscal and trade tensions, will provide support for the entire metal sector.
If buying can firmly break through $36.84, it will open the way to $37.32; and if gold moves towards $3370-3400, it may drive silver higher at the same time. On the contrary, if $36.30 is lost, it may accelerate the decline to $35.40, providing traders with a clear risk management technical level.
For now, the dollar, U.S. Treasury yields and upcoming U.S. labor data need to be closely watched. These external drivers will determine whether silver can break out to the upside or whether traders should prepare for a near-term retest of deeper support levels.
At 21:44 Beijing time, spot silver was quoted at US$36.319 per ounce, up 0.66%.
Meanwhile, gold recovered to its 50-day moving average of $3,320.70 and tested the key retracement level of $3,347.97. This move was aided by a weaker dollar and lower U.S. Treasury yields, both of which continued to support buying of precious metals.
Trump puts pressure on rate cuts, Fed easing expectations rise
President Trump's aggressive push for a new tax cut and spending bill while threatening to significantly increase tariffs by July 9 has roiled markets and pushed the dollar index to its lowest level since early 2022.
The decline of the US dollar, which fell 0.64% against the Japanese yen and 0.33% against the Swiss franc, is increasing demand for metals in overseas markets.
U.S. Treasury yields also fell, with the 10-year Treasury yield falling to 4.195% and the 2-year yield falling to 3.709%. This reduces the opportunity cost of holding gold and silver, while stimulating traders' interest in safe-haven assets.
Goldman Sachs now expects the Federal Reserve to cut interest rates three times this year, a significant change from its previous forecast of just one rate cut.
The market focus has now turned to Wednesday's ADP employment data and Thursday's non-farm payrolls data to confirm whether the labor market may be weakening. If the data shows weakness, it may exacerbate the decline of the US dollar; if the US dollar and interest rates become more volatile, it will provide further support for silver.
If gold surges, can silver break through resistance?
If gold breaks above $3,348, it could trigger momentum towards $3,370, a scenario that could have a spillover effect on silver.
For silver, short-term upside resistance is the small high of $36.84. If it breaks through this level clearly, the next target will be $37.32.
However, failure to hold the key $36.30 level could trigger a sharp correction to the main support range of $35.40-34.87, which includes the recent low of $35.28. The 50-day moving average of $34.30 remains a key long-term support level, and a test of this level could attract buying.
Silver Market Forecast: Focus on the dollar, yields and US data
(Source of spot silver daily chart: Yihuitong)
Silver's short-term outlook remains closely tied to the weakness of the U.S. dollar and the trend of bond yields. The possibility of the Federal Reserve shifting to deeper rate cuts, coupled with U.S. fiscal and trade tensions, will provide support for the entire metal sector.
If buying can firmly break through $36.84, it will open the way to $37.32; and if gold moves towards $3370-3400, it may drive silver higher at the same time. On the contrary, if $36.30 is lost, it may accelerate the decline to $35.40, providing traders with a clear risk management technical level.
For now, the dollar, U.S. Treasury yields and upcoming U.S. labor data need to be closely watched. These external drivers will determine whether silver can break out to the upside or whether traders should prepare for a near-term retest of deeper support levels.
At 21:44 Beijing time, spot silver was quoted at US$36.319 per ounce, up 0.66%.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
