Silver Surges Over 4% as Dollar Weakens, Bulls Target $30/oz

Spot silver surged by more than 4% on Thursday, closing the session at $29.86 per ounce, driven by a weakened U.S. dollar and positive technical momentum. According to FXStreet analyst Christian Borjon Valencia, silver prices saw a sharp rally from a daily low of $28.54 per ounce, peaking at $29.90 as the U.S. Dollar Index (DXY) dropped 0.5%, closing at 101.24.

The rally in silver was primarily attributed to softer U.S. economic data. The U.S. Department of Labor reported initial jobless claims rose to 230,000 for the week ending September 7, surpassing the 225,000 expected by the market. Additionally, the U.S. producer price index (PPI) rose 1.7% year-on-year in August, below expectations of 1.8%. The core PPI similarly came in lower than anticipated at 2.4% versus the 2.5% forecast.

Valencia highlighted that the weaker economic data reinforced market expectations of a potential Federal Reserve rate cut, further pressuring the dollar and lifting silver prices.

From a technical standpoint, Valencia identified a bullish "double-bottom" pattern supporting silver's uptrend. The metal broke through key resistance levels, including the 50-day moving average (DMA) at $28.99/oz and the 100-day moving average at $29.20/oz, signaling further gains ahead.

The Relative Strength Index (RSI) also indicates strong momentum, with bulls now targeting $30.00 per ounce as the next resistance level. Should silver break through this threshold, it will aim for the August 26 high of $30.18 per ounce, followed by the June 21 high of $30.84. If these levels are surpassed, silver could next target the July 11 high of $31.75/oz.

Valencia added that if bearish sentiment returns, sellers would need to push silver below $29.00/oz to halt the current upward trajectory.

As of 08:58 GMT, spot silver was trading at $29.95 per ounce.