Silver rose to its highest level in more than two months yesterday. Prices rose on expectations that the central bank will cut interest rates this year.
A slowdown in U.S. manufacturing and weakening consumer sentiment prompted investors to boost their bets on the central bank’s first interest rate cut in June, reducing the appeal of a default. assets.
In addition, bullion hedged against growing recessionary threats in Europe and geopolitical uncertainty in the United States. Markets now await the key US jobs report and Powell’s testimony later this week for more clarity on the timing of monetary easing.
In addition, the Greenback weakened against its major peers, hitting a one-month low. The dollar weakened after the US ADP jobs report in February showed that companies hired fewer workers than expected, which did not bode well for Fed policy.
Further, T-note yields dropped after Fed Chair Powell said it would likely be appropriate to begin lowering borrowing costs “at some point this year.” Strength in stocks Wednesday also reduced liquidity demand for the dollar.
The U.S. Feb ADP employment change rose +140,000, weaker than expectations of +150,000.
The U.S. Jan JOLTS job openings fell -26,000 to 8.863 million, showing a slightly stronger labor market than expectations of 8.850 million.
Fed Chair Powell said it will likely be appropriate to begin lowering borrowing costs “at some point this year,” but “the committee does not expect that it will be appropriate to reduce the fed funds target range until it has gained greater confidence that inflation is moving sustainably toward 2%.”
The Fed Beige Book said that “economic activity increased slightly, on balance, since early January” and that “consumer spending, particularly on retail goods, inched down in recent weeks as consumers have become increasingly sensitive to price changes.
Going ahead, US Gov Job numbers due on Friday, while ECB Policy decision and press conference later today will add further volatility in the prices.
Technical Outlook – Silver
Silver prices witnessed nearly 1.04% gain yesterday, reached its highest levels in a two month and settled at 74138.00.
As per the view given on 1 March 2024, prices continued trading on a higher side. And after breaching the resistance 71800 hit both predicted levels of 72080-72600.00. Trading beyond the predicted levels.
A strong break of the descending channel line on the chart indicates further bullish momentum. In addition, prices form a long rising candlestick. However, after the recent rally, prices may show some consolidation below its mass resistance at 74550.00 before the next uptrend.
However, a break above 74550 will open the door for next levels 74800-75150 very soon.
On the downside, crucial support is seen at 72900 below it prices may retreat towards 72150-71750.00
Commodity Samachar
Learn and Trade with Ease
Also Read: Natural Gas Outlook: Reaching the Top, But will the Momentum Continue? , Economic Data: UK Budget, Fed Statement, and BoC Policy Focus Is On!!
Recommended Read: Forex News Letter: Will Jerome Powell Brew Up A Storm?
Want help on your traders?
Chat with our Analyst