Silver Price Forecast: XAG/USD attracts some buyers above $29.00, focus on US GDP data

• Silver price gains traction around $29.45 in Thursday’s early European session, up 1.03% on the day. 
  

• Further decline of the USD, ongoing Middle East tensions support the silver price.
  

• Investors await the second estimate of US Q2 GDP growth numbers on Thursday ahead of PCE inflation data. 

Silver price (XAG/USD) edges higher to near $29.45 during the early European session on Thursday. The ongoing geopolitical tensions in the Middle East and weaker US Dollar (USD) amid the Federal Reserve (Fed) rate cut expectation provide some support to the white metal. 

The anticipation that the Fed would start easing its monetary policy in September exerts some selling pressure on the Greenback and is underpinned by the USD-denominated Silver price as it makes Silver cheaper for most buyers. Futures markets have fully priced in a 25 basis points (bps) rate cut in September, while the odds of a deeper rate cut stand at 36.5%, according to the CME FedWatch Tool.

Furthermore, the Middle East tensions remain high, and market players will closely monitor the development surrounding Israel and Hezbollah conflicts. Any sign of escalation could boost the white metal. 

On the other hand, the firmer USD might drag the white metal down. The release of the US Gross Domestic Product (GDP) Annualized on Thursday and the Personal Consumption Expenditures (PCE) Price Index on Friday could offer some hints about the US interest rate path. The US economy for the second quarter in the second estimate is estimated to grow 2.8%, while the  Fed’s preferred gauge of inflation, Core PCE, is projected to rise from 2.6% to 2.7% YoY in July.