Silver will take rectangle’s lower boundary again

01 February 2023 196
Silver will take rectangle’s lower boundary again

The silver price line looked quite similar to other commodities yesterday — a decline In the first half of the session and a strong buyback in the second half. Today, silver price is moderately decreasing before the Fed meeting. The media is heating up this situation, making it worse, as there are many forecasts affecting the precious metals, because today the Fed's rhetoric was way too harsh.

Goldman Sachs’ strategists believe the U.S. Federal Reserve (Fed) will signal further interest rate hikes at its February meeting. Prolonged rate hikes may put some pressure on the metals markets. What is even more important is that, FOMC signals of further rate hikes this year, according to economists.

Goldman's strategists also suppose that the Fed's comments may affect on precious metals.

Data from a survey conducted by Reuters indicates that market participants have significantly increased their own forecasts for the gold price of gold. However, the high level of interest rates is not conducive to a renewed rally in the precious metals market. 

Other experts, including Thomas Price, have the opposite view, remaining bearish on the precious metal's prospects. According to them, the Fed will keep the cycle of raising interest rates in order to curb the growth of inflation.

In recent days, more skeptics spoke about the possibility of further gains in the precious metals.

As for technical analysis, silver remains in its rectangle, what has been at the same position for almost two months already. Yesterday and last week there were attempts to break it down. They both were unsuccessful. Probably there will be another attempt against the background of the Fed meeting. The RSI Oscillator on the daily timeframe is in the neutral zone and does not show any clear signal for the silver's further movement. As the Fed meeting is planned for today, the market volatility may be high. So it would be better to put bold stops after each trade.

The main bet at the moment is for silver to move below the rectangle. In this case, the downside target will be equal to its height. Considering the support levels, which are located below, the target will be set at $22.20. Stop-loss will be taken behind the upper border of the sideways movement near the level of $24.56.

The silver price decline:

Take profit – 22,20

Stop-loss – 24,56

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

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