White metal retreated, as Fed officials talk up further hikes

After witnessing an abrupt bullish move, the white metals retreated significantly and settled in a red. First intraday loss after 5 April 2023 on Friday.

Precious metals suddenly slipped more than 1.5% after U.S. dollar rebounded from a one-year low. As bets on a May rate hike jumped after Federal Reserve officials signaled that. They weren’t ready to hoist the white flag on further rate hikes as inflation still remains too hot.

Silver prices on the MCX division settled at 75677, and settled at 1.62%. It made an intraday high of 77549, which was the highest level since January 2021.

Fed Governor Christopher Waller on Friday called for further rate hikes. Saying that the job on inflation was still “not done,” as inflation remains “far too high.”

The hawkish remarks arrived just days after data showed that headline inflation fell more than expected. But core inflation, which strips out volatile food and energy prices and is more closely watched by the Fed, remained sticky.

Looking ahead, US, Europe and UK PMI data next week will decide precious metals momentum fundamentally.

Technical View

Silver prices retreated from the two year’s high of 77549 and settled at 75677, down by 1.62% on Friday. On a weekly basis prices gained 1.48%.

Intraday price action resulted in formation of bearish engulfing candlestick pattern. Which is creating a probability for temporary correction in near future.

On the downside, crucial support is seen at 75140 and a break below will expect to attract selling activities. Downside target is around 74350-73900. Further, 73800 will act as a decisive support, if prices break then will expect to drop towards 72700-72100 in days to come.

On the upside, immediate resistance is seen at 75900 which will act as a short time stop loss.

A break above only will witness pullback towards 76500-77500 again.