Silver Breaking Out
Silver prices are drawing plenty of attention as the new trading week gets underway. The futures market has soared to fresh record highs on Monday, trading 57,2725 as of writing. This comes on the back of a breakout move on Friday which saw the market expanding beyond the 54.4433 level which had capped the rally twice this year. The move higher comes alongside a push higher in gold, now at its highest level in 5 weeks, as dovish Fed expectations drive fresh demand for metals.
Dovish Fed Repricing
A sharp repricing in traders’ Fed outlook has seen USD coming under fresh pressure this week. The market is now pricing in an 85% chance of a cut at the upcoming FOMC, up from less than 40% two weeks ago. This repricing comes on the back of some weaker-than-forecast US data and dovish Fed commentary. Looking ahead this week, there is plenty to watch this week with a slew of key US readings due including ISM manufacturing later today, ADP jobs and ISM services on Wednesday, weekly jobless claims on Thursday and core PCE & UoM data on Friday. Any further data weakness should cement dovish expectations ahead of the FOMC, keeping USD pressured lower and silver pointing north. It would likely take some major data surprises to disrupt dovish expectations at this point, particularly with October and November jobs data not due until post-FOMC.
Technical Views
Silver
The rally in silver has seen the market breaking out above the 54.4433 level which had previously capped the rally twice this year. With momentum studies bullish focus is on a continuation higher while we hold above this level. If we see any correction sub-54.4433, the retest of the broken bull channel highs and the 49.5217 level will be the next support area to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.