Silver acts as catch-up

12 January 2023 61
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The dynamics of the price for silver looks weaker than for gold last days. However, the main event for silver today will also be the U.S. inflation statistics for December. The forecast assumes a price increase by 0.3%. It is quite possible that inflation will come out better than expected. Preliminary data from the University of Michigan hints at this.

According to a study by the University of Michigan, the annual inflation forecast released along with a report on overall consumer sentiment in December fell to 4.4% from 4.9% in November. The indicator was also reduced from a preliminary value of 4.6% two weeks ago. As a result, the forecast for U.S. consumer inflation fell to a low of 18 months. Positive data on inflation will have a positive effect on the price for silver.

 

Besides, China is the largest consumer of silver in the world, as it accounts for 18% of global demand for products made of this metal. The country continues to remove restrictions, it will help to stimulate economic activity. News about the growing demand for oil from China confirms this theory.

According to Reuters and Bloomberg data, China presented its second batch of quotes for crude oil imports for 2023 on Monday. As a result, the total for this year is up 20% compared to the same period last year. According to the document of the Ministry of Trade, 44 companies received quotas on imports of crude oil in the amount of 112 million tons.

 

The technical analysis shows that silver fell out of its uptrend and formed a flat movement trend. It is possible to trade within that flat, trying to catch a movement on the U.S. inflation data. Plotting the Fibonacci grid from the price low to the current high, it is obvious that the first correction target of 0.236 is achieved. Now the price for silver is trying to catch a new wave of growth.

The growth target will be the upper boundary of the flat, which is the level of $24.3. Stop-loss will be short near the level of 23.2, because in case of negative inflation data, the downward movement of the metal will be sharp and strong.

 

Rise in the price for silver:

Take profit – 24.3

Stop-loss – 23.2


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