Silver Price Forecast: XAG/USD holds key support of $32.30 with US elections in focus

• Silver price stays above $32.30 ahead of US presidential elections.
• US Trump’s victory could be beneficial for the US Dollar and bond yields.
• Investors will also focus on the US ISM Services PMI for October.

Silver price (XAG/USD) jumps to near $32.60 in Tuesday’s European session. The white metal remains broadly sideways above the key support of $32.30 ahead of the United States (US) presidential elections, which will start in the New York session. The asset is expected to face sharp volatility after agencies will start providing exit polls.

Traders expect a neck-to-neck competition between former US President Donald Trump and Democratic candidate Kamala Harris. The outlook on precious metals relies heavily on the US election outcome. Trump's victory could be unfavorable for precious metals, such as Silver, as he vowed to raise tariffs on imports and trim corporate taxes, which will escalate price pressures.

The scenario that will improve the outlook of the US Dollar and bond yields in an inflationary environment will prompt the need for a restrictive interest rate stance by the Federal Reserve (Fed).

Ahead of US elections, the US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, edges lower to near 103.70 but remains inside Monday’s trading range. 10-year US Treasury yields wobble near 4.3%.

In Tuesday’s session, investors will also focus on the US ISM Services PMI data for October, which will be published at 15:00 GMT. The agency is expected to show that activities in the services sector expanded at a slower pace, with the index seen at 53.8 against 54.9 in September.

Silver technical analysis

Silver price strives to gain ground near the key horizontal support plotted from the May 20 high of $32.50 on a daily timeframe, which acted as resistance earlier. The white metal wobbles near the 20-day Exponential Moving Average (EMA), which trades around $32.80.

The 14-day Relative Strength Index (RSI) falls inside the 40.00-60.00 range, suggesting that a bullish momentum is over for now, however, the bullish trend remains intact.

 Silver daily chart