Silver price surged sharply on Thursday, posting solid gains of over 2% as investors sought safe havens and moved away from the US Dollar, buoyed by the Federal Reserve’s rate cut.
Following the Fed’s decision, silver prices extended their rally after experiencing losses on Wednesday. Fed officials opted for the larger of two cuts anticipated by Wall Street, citing inflation moving sustainably toward the Fed’s 2% target as justification. Fed Chair Jerome Powell emphasized that the Fed could maintain labor market strength with careful policy adjustments. He noted that inflation risks have eased, while the labor market remains robust. However, Powell added that if inflation persists, “We can dial back policy more slowly,” while also indicating that the Fed is “not in a rush” to normalize policy, based on current projections.
Meanwhile, US jobs data took center stage after Powell’s Jackson Hole speech, where he emphasized the Fed’s shift toward achieving its maximum employment mandate. On Thursday, the US Labor Department reported that unemployment claims came in below expectations, highlighting continued strength in the labor market.
At the same time, US Treasury yields mirrored prices upward movement, with the 10-year Treasury note yield rising by 3.5 basis points to 3.74%. Despite this, the Greenback weakened, with the US Dollar Index (DXY) dropping 0.31% to 100.62.
Looking ahead this week, Philadelphia Fed President Patrick Harker is expected to speak, although the US economic calendar remains light.
Technical Outlook – Silver Price
Silver prices surged over 2.5% yesterday, hitting a high of 90,600, the highest level in two months, before settling at 89,968, compared to the previous day’s close of 88,299.
As anticipated in the outlook shared on 13 September, silver prices remained on the higher side, reaching both predicted levels of 88,050-88,750 yesterday.
A strong breakout from the bullish consolidation signals the potential for continued upward momentum. However, prices must break above the immediate resistance at 90,560 to test the next targets of 91,250-92,150.
On the downside, immediate support is seen at 88,180, with a break below this level potentially leading to a retreat towards 87,450-86,750.
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Commodity Samachar Securities
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