In resent trading days, silver has consolidated below the range of $24.7 - $26.1. Problems with the U.S. government debt do not support the precious metal. By June the default issue should be resolved, because that is when the U.S. government will run out of money. The debt ceiling will be raised, and there will be no collapse of the global economy. In 2011, it was raised three days before the default in the States.
The pressure on silver from central banks continues.
According to economists surveyed by Bloomberg, the European Central Bank (ECB) will keep interest rates at their peak longer than previously expected.
The survey, conducted May 5-11, predicts the first deposit rate cut in the second quarter of 2024. Earlier forecasts pointed to ECB policy easing in the first quarter of the next year.
This change in expectations was due to a steady indicator of core inflation. It excludes volatile components in its calculation and is the main indicator of price changes for the central bank.
Some analysts doubt the stable growth of precious metals. Before renewing their historical highs, they are likely to go through a deep correction.
Stanley Druckenmiller, chairman and president of Duquesne Capital, spoke at the annual Sohn Investment conference. The investor is known for his cautious position on gold and silver, but he has these assets in the portfolio.
In his opinion, the U.S. economy will be in deep recession. This factor is unfavorable for precious metals. However, Stanley is betting that geopolitical uncertainty and the growing trend toward dedollarization will continue to support silver and gold. Fiscal and monetary regulators are at their limits, so further tightening of monetary policy is eliminated.
According to the technical analysis, the price for silver has consolidated below the flat range. Now the rectangle, which was formed from December 2022 to February 2023, becomes relevant. Lower boundary of the last year at $23.1 will be the downside target for silver. Stop-loss can be set at $24.8, which will mean a return to the former price corridor.
Decrease in the price of silver:
Take profit – 23.1
Stop-loss – 24.8
This content is for informational purposes only and is not intended to be investing advice.