Silver rises amid the Middle East tension and Fed meeting anticipation

29 January 2024 139
Silver rises amid the Middle East tension and Fed meeting anticipation

Silver prices are showing moderate growth on Monday due to the increased turmoil in the Middle East. However, the current upward trend in the price of the white metal is limited ahead of this week's U.S. Federal Reserve (Fed) meeting.

 

Concerns over geopolitical risks have increased after a drone attack on American troops in Jordan. Precious metals have traditionally been considered safe-havens in times of political and economic turmoil.

 

Traders are in anticipation over the upcoming Federal Reserve meeting as interest rate decisions are important for the white metal price.

 

The recent U.S. fourth quarter GDP report revealed unexpectedly strong economic growth. At the same time, data on the core personal consumption expenditure index for December showed a moderate inflation rate. This contradictory data creates a challenging environment for silver trading as traders look to understand the relationship between these fundamentals and the Federal Reserve's monetary policy.

 

Market participants are forecasting the U.S. central bank to keep its interest rate unchanged at the January 30–31 meeting. At the same time, special attention will be paid to the comments of the head of the Fed Jerome Powell.

 

With the current 10-year U.S. Treasury bond yield at 4.141%, market sentiment on future economic and inflation prospects is clearly evident. Typically, higher bond yields strengthen the dollar, which in turn makes silver more expensive for holders of other currencies.

 

Silver prices are within a broad correction on the D1 timeframe.

 

On the H4 timeframe, the silver price has broken out of the downward corrective trend, consolidating above the resistance level. Bulls Power indicator volumes (standard values) are remaining in the positive zone, indicating an upward movement.

 

Signal:

Short-term prospects for silver suggest buying

The target is at the level of 24.850.

Part of the profit should be taken near the level of 23.650.

A stop-loss could be placed at the level of 21.650.

 

The bullish trend is short-term, so trade volume should not exceed 2% of your balance.


This content is for informational purposes only and is not intended to be investing advice.

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