The technical picture for silver is a bit worse than for gold. It is similar to the gold metal, it held the uptrend, but there are no targets for the rebound. But there is a definite downside target for silver to get the previous local high of $25.0.
As we reported in our forecast for gold, analysts and statistics are supporting the growth of precious metals. However, central banks are not in a hurry to ease their rhetoric. On Friday, there were similar statements from the representatives of the banks and the Fed. Therefore, in the short term it is possible that the correction will continue after the current attempt of quotes to rebound.
According to the U.S. Treasury Secretary, despite the turbulence in the banking sector last month, lower inflation with a strong labor market is possible, and America is moving toward it.
In addition to the collapse of banks and tensions in the labor market, there are other factors that have influenced the growth of inflation in the U.S., said Janet Yellen. Thus, disruptions in the supply chain caused by the pandemic have slowed down the development of critical economic sectors, particularly the automobile industry.
In Yellen's view, supply chains, as well as housing prices in America, are stabilizing at the moment. U.S. economic data published last week showed a slowdown in inflation and a decline in consumer spending.
A strong labor market could prevent a rapid reversal of Fed monetary policy.
As it was noted above, on the basis of the technical analysis, silver has held a bullish trend. However, there are no targets from above, except the renewal of the maximum. Currently, this scenario seems unlikely because the sales on Friday showed the bears' strength. On the daily timeframe there was a bearish engulfing, which may indicate a reversal in the metal price.
Therefore it is possible to open short positions in silver in order to break the uptrend and change the quotes into sideways movement. Pro-trade, which was at the beginning of April, corresponding to the price of $25.0, could be the downside target. Stop-loss can be set when the price rises above the boundaries of the candlestick body at the local highs. This is the level of $25.9.
Decrease in the price of silver:
Take profit – 25.0
Stop-loss – 25.9
This content is for informational purposes only and is not intended to be investing advice.
