Silver is under renewed pressure from sellers

26 January 2023 187
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Silver is still trading in a flat but the growth target of the previous forecast has not been reached yet. However, silver is getting closer to the upper limit of the trend, which could trigger a corrective move at any moment.

As with gold, silver will be affected by the US GDP data coming out today. The better the statistics are, the more the Fed will have a chance to keep raising the rate. This scenario is fundamentally negative for silver, so there is a high risk of moving to the lower limit of the rectangle.

The US PMI data for January came out earlier this week and showed stronger than expected growth. The reasoning, as with GDP, is exactly the same. A strong U.S. economy means the Fed will continue to bring inflation down to the target, meaning more rate hikes in the near term. The ECB is also resolute about the rate. This data could trigger a wave of correction in silver prices.

Lots of analysts talk about the growth of precious metals this year. But others claim that there will be a corrective movement in the coming quarters. A new wave of growth seems possible after that.

Jeffrey Christian, managing partner at CPM Group, says that this year will be a period of shifting. He expects rates to keep moving higher, though he foresees a steep rise, and suggests a further cooling of inflation in the U.S. As for 2023, Christian gives a moderate outlook for gold, stating that by mid-year the minimum price might be seen at $1,700 to $1,720 per ounce. In fact, he predicts the price is likely to keep rising towards $2,000 by the year-end.

Silver continues to trade in the $23.0 - $24.5 rectangle, as it was mentioned earlier. There is a downtrend formed within it on the 1-hour timeframe. The downside target is at the lower trendline of $23.00. 

Stop loss is placed near the upper limit of the trend at $24.56. In fact, Stop loss is set higher as it is a sideways move, and the US GDP data may trigger volatility in the market.

Silver is likely to decrease:

Take profit - 23.00

Stop-loss - 24.56

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

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