Silver prices continued to decline on Monday amid a stronger dollar, anticipated central bank meetings and the release of the U.S. inflation data this week.
Silver's recent 1.57 % decline in price is attributed to a stronger than expected increase in the U.S. jobs on Friday. This led to revised forecasts for the Federal Reserve's (Fed) actions next year and a temporary strengthening of the dollar and bond yields, which put pressure on the precious metal's prices. This was reported by KCM Trade Chief Market Analyst Tim Waterer.
As the data showed, last month in the U.S. non-farm payrolls increased by 199 000 jobs. This was above Reuters economists' expectations, who predicted an increase of 180 000. Such indicators show the stability of the labor market in one of the largest economies in the world. As a result, hopes of the Fed easing its monetary policy in early 2024 are gradually fading.
Tuesday's U.S. consumer price report for November will draw particular attention of market participants, who are looking for additional signals about future interest rate changes ahead of the Fed's announcement on Wednesday.
The markets forecast the U.S. central bank will keep rates between 5.25-5.50% this week. Traders are already shifting from expecting a rate cut in March to a rate cut in May. In addition, the European Central Bank, Bank of England, Norges Bank and the Swiss National Bank will hold their meetings this Thursday.
Silver quotes are in a broad correction on the D1 timeframe.
An upward trend is forming on the four-hour time frame. The price is approaching the support of this bullish channel. Divergence of the Relative Strength Index (RSI) indicator (standard values) portends a change in the direction of the silver rate. A rebound in price from the support trendline near the 22,750 level will indicate a move to the upside.
Signal:
Short-term prospects for silver are to buy.
The target at the level of 25.550
Part of the profit could be fixed near the level of 24.150
A Stop-loss could be placed at the level of 21.770
The bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
