Silver closed last week with a strong bullish Marubozu candle. The rise of the precious metal might be associated with fears of new problems in the banking sector. Hopes for a potential pause in the U.S. Federal Reserve’s hiking cycle also supported the prices.
As former Goldman Sachs CEO Lloyd Blankfein said, this week the U.S. Fed might take a break in raising interest rates.
Blankfein believes that tighter control followed the failures of Silicon Valley Bank and Signature Bank will lead banks to make fewer loans on deposit. According to him, such tightening of lending, in turn, will lead to an economic growth decline and will be in line with the Fed’s goal of taming inflation.
The slowdown in U.S. interest rate hikes, as well as the pause, are favorable for precious metals, and particularly for gold and silver.
Kitco News Gold Survey among Wall Street analysts showed that the market outlook for gold in the near future remains optimistic. According to these data, 41% of specialists expect a continuation of the bullish trend in gold. At the same time, 36% of respondents suppose that the price will move flat, and another 23% have a bearish view on the market.
Since silver is highly correlated with gold, and it is also considered to be a safe-haven asset, a continued rise in silver prices is expected.
According to the technical analysis, silver is correcting today after a substantial increase on Friday. The metal tested the 0.5 Fibonacci level today from the whole correction wave.
Friday's bullish Marubozu candle hints at further gains after a corrective move today. The nearest growth target is 0.618 and the lower boundary of the rectangle. The second target looks more interesting, since this level was traded for a month and a half before the exit down was made.
Therefore, the growth target will be $23.2. The stop-loss will be set at the exit below today's lows and the 0.5 Fibonacci level, which is equivalent to the price of $22.2.
Silver prices are likely to rise:
Take profit – 23.2
Stop-loss – 22.2
This content is for informational purposes only and is not intended to be investing advice.