Silver Holding at Highs
Silver prices remain paused near record highs as we move through the middle of the week. The market broke out to fresh record highs yesterday but has since lost momentum as traders await key US data due tomorrow and Friday. Yesterday, comments from Fed chair Powerll failed to deliver a fresh move on either side of the market. Powell struck a broadly neutral tone warning of a fine balance between downside risks to the jobs market and upside risks to inflation, warning that the Fed must be very cautious in how it proceeds with further easing.
Dovish Fed Expectations
Despite these comments, Fed rate-cut expectations remain entrenched with the CME group pricing a roughly 95% chance of another .25% cut next month and a roughly 70% chance of a furtehr .25% cut ahead of year end. While this dovish outlook remains, silver prices look poised to continue higher, in tandem with gold which has been advancing steadily in recent weeks. The Dollar is holding up for now on the back of the FOMC and Powell’s comments yesterday. However, the greenback is highly vulnerable to a fresh plunge lower in response to any downside data surprises, particularly in jobs and inflation reading. With that in mind, traders will be closely watching weekly jobless claims tomorrow and core PCE on Friday.
Technical Views
Silver
The rally in silver has stalled for now into a fresh test of the bull channel highs. Bearish divergence in momentum studies suggests room for a correction near-term. However, the broader bull outlook remains while price holds within the channel and above the 39.2189 level, keeping focus on a continuation higher.
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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.