The silver price made a correction after a rapid rise. Currently, the prices have found strong technical support and are set to resume the uptrend. There are also enough fundamental factors for the metal's growth. The main one is the decline in U.S. inflation at a higher rate in June.
Investors expect global regulators to begin cutting key rates within the next 6 months. This is a strong growth driver for precious metals. The ECB, Fed and BOJ meetings this week are unlikely to change investor sentiments, as the regulators' decisions are already embedded in asset prices.
The European Central Bank (ECB) is going to adhere to its plan of keeping interest rates at the highest levels for a long period of time. However, economists do not believe such a scenario. They suppose that the rate will have to start decreasing within the next 6 months.
The majority of participants polled by Bloomberg expect the interest rate to rise to 4.5% by September. The regulator will begin to ease the policy as early as in March.
Silver is also an industrial metal. It has great growth prospects on this side as well.
According to the data, silver prices might have strong support over the next ten years. Bank of America believes that the precious metal will face the most significant supply shortage.
As analysts said, silver plays a key role in solar power generation and is an important component of photovoltaic solar panels. The metal is also needed for the production of electric vehicles and the overall electrification of the economy. According to Bank of America, silver supply shortages will reach 125% by 2030.
According to the technical analysis, the silver price corrected to the 0.236 Fibonacci support from the last year's price lows. This level is also the upper limit of the rectangle, which was relevant at the end of 2022 and the beginning of 2023. The price is expected to rebound from the current point.
The growth target will be the local high of recent weeks at the $25.2 level. A Stop-loss will be set at updating the local lows, which corresponds to the price of $24.2.
Silver prices are likely to rise:
Take profit – 25.2
Stop-loss – 24.2