Silver remains in its rectangle

16 January 2023 225
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Silver, as well as other commodities, has risen over the recent trading sessions. But the silver price is still locked in a rectangle of $23.3-$24.5. A possibility of an upward-leading exit from this area is now getting less and less likely.

The majority of analysts are still optimistic about the silver price this year.

Nevertheless, our short-term expectations (for the nearest trading sessions) boil down to the fact that silver will again move into correction, according to the tech analysis and correlations to other assets.

According to a recent survey of investors, conducted by the Kitco company, respondents suggest the silver price to rise during 2023. There were 1482 investors involved in the survey. The average forecast estimates the silver price to reach $38 per ounce. 5% of the respondents (or 85 persons) expect the price to go below $23 per ounce towards the end of the current year. At the same time, almost half of the respondents, or 48%, forecast the silver price to exceed $38 in late 2023.

In a forecast on gold correction, we also mentioned a correlation between gold and the Dollar Index, as well as the 10-Year U.S. Treasury bonds. A similar logic would also work for silver. It’s necessary to be reminded that yields on the U.S. bonds approached the extreme levels of September and June 2022. So, some strong drivers are required for a downward break, and there are none such drivers yet. Thus, a bounce up from the current levels is rather likely.

The Dollar Index, in its turn, showed a 50% decline from its growth wave. We suggest that it’s worth expecting a rebound or consolidation of the Index at the current level.

This dynamic will be unfavorable for gold and silver.

As shown by the tech analysis, also mentioned above, the silver price remains within a rectangle. Silver is now at the top limit of the range. Considering that gold is now in the overbought zone, it’s possible to assume that the price will still be in this trading diapason, though going down to its lower bottom limit. The target of this decrease will be the level of $23.30. Stop-loss may be set in case of upward-leading exit from the rectangle, near $24.55.

Decrease in the silver price:

Take profit – 23,30

Stop-loss – 24,55

This content is for informational purposes only and is not intended to be investing advice.

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