Silver prices fell amid the publication of U.S. inflation data for May. Its level declined more than expected, supporting the view concerning the need to pause the Fed’s monetary tightening cycle this month.
The U.S. Consumer Price Index (CPI) rose by 4.0% in May, the lowest annual gain in more than two years. However, it is still well above the 2% target. The core CPI rose by 5.3% over 12 months, signaling continued strong pressure on the cost of goods.
According to the CME Fedwatch tool, expectations that the regulator will keep its target rate between 5% and 5.25%, are currently 95.4%.
The Fed is expected to announce the interest rate at 17:00 GMT. Fed Chairman Jerome Powell will hold a press conference in half an hour. The market is more interested in the regulator's plans for the future. The Fed's latest forecasts suggested a rate cut only by the end of 2024. If the head of the central bank talks about changing monetary policy, the volatility in financial markets will significantly increase.
ANZ bank strategists analyze the outlook for silver. The volume of imports in India has stabilized after last year's exceptionally high figures. However, the fundamental background remains favorable, and industrial demand may recover after China's economic growth stabilizes.
Macroeconomic factors continue to support gold and silver prices. According to ANZ bank experts' forecasts, silver prices will reach $26 by the end of this year.
The silver rate forms the uptrend of the H4 timeframe. The U.S. inflation statistics brought the quotations of white metal down outside the trend boundaries, but the strength of the bulls brought the prices back to the rising corridor. Price's move out of the trend has marked strong support at 23.60, which has proved its importance several times. The price is aiming for resistance at 24.50.
Signal:
Short-term prospects for silver are purchasing.
Target is at the level of 24.50.
Part of the profit should be fixed around the level of 24.10.
Stop-loss is around the level of 23.20.
The bullish trend is short-term, so choose a trading volume of no more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
