Silver prices hit the two-week high on Tuesday as the dollar lost control of recent six-month highs.
The dollar fell 0.1% against other major currencies, making silver less expensive for overseas buyers ahead of key policy decisions by central banks in the U.S., U.K. and Japan this week.
While the vast majority of market participants expect the Federal Reserve (Fed) to keep rates unchanged, their main focus remains on the outlook for future monetary policy.
According to Michael Langford, Scorpion Minerals Chief Investment Officer, Fed Chairman Jerome Powell's speech is likely to emphasize the persistence of inflation risks. Low gasoline and diesel inventories around the world pose a significant near-term risk to inflation targets. If inflation rises significantly again, it will become harder to curb, Langford added.
According to economists surveyed by Bloomberg News, a robust U.S. economy will prompt the U.S. regulator to conduct another interest rate hike this year. After that, the cost of borrowing will remain at peak levels for longer than previously expected.
The Fed will keep the rate in a range of 5.25% to 5.5% at its September 19-20 meeting. It will remain at that level until the first cut next May. In July, economists had anticipated the start of monetary easing in March 2024.
The U.S. economic growth is forecasted to be 2% this year, double the 1% forecast in June. The year-end price increase is estimated to be 3.2%. Economists expect the 2% inflation target to be reached in 2026.
The silver rate is showing a corrective rise on the D1 time frame.
In terms of wave analysis, the price is forming the third ascending wave on the hourly time frame. Breaking through the top of the first wave at 23,295 will strengthen the upward price movement.
Short-term prospects for silver suggest buying.
The target is at the level of 24,800.
Part of the profit should be taken near the level of 23,815.
A stop-loss could be placed at the level of 22,265.
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.