On Monday, the silver price slightly decreased compared to Friday's highs. The sentiment on the precious metal market remains ambiguous. Investors are still pinning their hopes on the Chinese government's new stimulus measures, while geopolitical tension in the Middle East supports the price of white metal.
The conflict between Israel and Hamas is increasing attention to the growing risks for financial markets. Investors expect that this confrontation may attract other countries, which will raise oil prices. This could have a negative impact on the global economy.
According to Reuters, the volatile situation in the Middle East is increasing global demand for risk-free assets such as gold and silver. In addition, traders are closely monitoring changes in the US monetary policy stance.
The Consumer Price Index (CPI) in the US in annual and monthly terms for September amounted to 3.7% and 0.4% respectively. Both figures beat market expectations. The encouraging inflation data in the country made investors reconsider the likelihood of an interest rate hike by the Federal Reserve (Fed). On the one hand, high interest rates are weighing on precious metals prices. On the other hand, it signals the beginning of monetary policy easing. Future interest rate cuts by the Fed may increase the attractiveness of gold and silver in the medium term.
Going forward, market participants will pay close attention to the US retail sales figure for September and the speech of Fed Chairman Jerome Powell this week. The publication of data on China's gross domestic product (GDP) and industrial production for the third quarter will also have an impact on the value of the precious metal.
The silver price is forming a new upward trend. The price is testing the descending resistance on the H4 timeframe.
In terms of wave analysis, the price is forming the third ascending wave on the H1 timeframe. The breakout of the top of the first wave at 22.02 has already taken place. The upward movement may intensify in the near term.
Signal:
The short-term outlook for silver is to buy.
The target is at the level of 25,000.
Part of the profit should be fixed near the level of 23,550.
A Stop-loss should be placed near the level of 21,150.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
