Fundamental
Overview
Silver, much like gold, has
been rallying strongly recently with the price now trading near all-time highs.
There’s nothing fundamental driving the price action as a short squeeze looks
like the most reasonable culprit.
We had soft weekly ADP data
on Tuesday but if that was the reason, we would have seen a stronger reaction
already on Tuesday not the day after.
The reopening of the US
government will bring back the key US data like the NFP and CPI, and those will
be key risk events for silver.
Strong US data, especially
on the labour market side, should keep weighing on gold as it would keep the
market speculating on rate cuts pause. Conversely, weak data is likely to
support the precious metal as it would give the Fed more reasons to keep cutting
rates.
In the bigger picture, silver
should remain in an uptrend as real yields will likely continue to fall amid
the Fed’s dovish reaction function. But in the short term, a further hawkish
repricing in interest rate expectations should keep weighing on the market.
Silver Technical Analysis – Daily Timeframe
On the daily chart, we can
see that silver is trading around all-time highs. This is where we can expect
the sellers to step in with a defined risk above the all-time high to position
for a drop into the major trendline around the 45.00 level. The buyers, on the
other hand, will want to see the price breaking higher to increase the bullish
bets into new all-time highs.
Silver Technical Analysis
– 4 hour Timeframe
On the 4 hour chart, we can
see that we have a strong support zone around the 49.50 level where we have
also the minor upward trendline for confluence. If the price gets there, we can
expect the buyers to step in with a defined risk below the trendline to position
for a rally into a new all-time high. The sellers, on the other hand, will want
to see the price breaking lower to increase the bearish bets into the major
trendline.
Silver Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we have another minor upward trendline defining the bullish momentum
on this timeframe. The buyers are likely to lean on the trendline to keep
pushing into new highs, while the sellers will look for a break lower to start
targeting the 49.50 support next
