Silver price have paused their losing streak and rebounded by over two percent yesterday. The prices found support from two-month lows as the dollar rally stalled and investors reassessed the outlook for Federal Reserve monetary policy.
The dollar faced a wave of profit-taking following its recent rally which was driven by expectations of fewer Fed rate cuts and optimism about US economic outperformance under the incoming Trump administration.
Adding to this, the euro gained amid short-covering as a G-20 summit helped allay fears about stagnating global growth.
Chinese President Xi Jinping told Australian Prime Minister Anthony Albanese that China’s relationship with Australia has achieved a turnaround and the two countries are maintaining a positive momentum of development. Xi also announced an initiative to funnel sci-tech innovations to the Global South and called for more bridges of cooperation.
Global trade tensions add a risk to an already weak euro zone economy, European Central Bank Vice President Luis de Guindos said. Bundesbank President Joachim Nagel downplayed the global inflation impact from tariffs.
A quarter-point cut in euro zone’s interest rates by the end of the year would be reasonable, ECB policymaker Yannis Stournaras said. Investors are now waiting for more comments from Fed officials this week for further guidance on the US interest rate path.
Markets are also focused on China’s upcoming LPR decision, with hopes that the authorities will implement additional stimulus measures to boost economic growth.
China, the world’s biggest metals consumer, has experienced slowing economic growth and the government has been releasing supportive policies to revive activity, though the measures so far have not directly targeted physical metals consumption.
Meanwhile, geopolitical tensions escalated as US President Joe Biden authorized Ukraine to use US-made weapons for strikes deep within Russia.
This has raised concerns about a broader global conflict and spurred renewed demand for safe-haven assets like silver.
Technical Outlook – Silver Price
Silver prices rebounded from the low of 86,844 on Thursday, climbing to today’s high of 90,752 yesterday. The prices settled at 90513, up from Friday’s close of 88,421, up 2.37%.
From the start of the month, silver has been under pressure, falling nearly 9% from its peak of 99,332. However, the formation of a hammer candlestick indicates a potential recovery rally.
This recovery is likely to continue, with a break above 90,580 potentially paving the way toward the next resistance at 91,750–92,300. Alternatively, failure to break above this level may lead to consolidation, with immediate support at 88,500–87,450 before any significant move.
Traders may take action after a breakout 90,580.
Until then, Happy Trading!
Commodity Samachar Securities
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