Silver prices are showing a decline on Monday, having been under pressure from the strengthening dollar. Investors are waiting for additional guidance from the U.S. Federal Reserve (Fed) on the timing of the first interest rate cut this year.
As Fed spokesman Christopher Waller said last week, the regulator is in no hurry to ease monetary policy. This led to the adjustment of market expectations regarding the imminent reduction of interest rates in the US.
This adjustment also followed the release of data, according to which consumer and manufacturing prices in the US exceeded expectations at the beginning of the month. In addition, the minutes of the Federal Open Market Committee (FOMC) meeting showed the concern of most policymakers about premature rate cuts.
In the near future, investors are expecting the publication of the US macroeconomic data, including durable goods orders for January. Markets expect a 4.5% drop in this indicator compared to December levels. These include consumer electronics, jewelry, and medical devices, all of which are linked to industrial demand for silver, which accounts for about half of total demand for the white metal. The key personal consumption expenditures price index released on Wednesday may provide additional clues regarding the Fed's future decisions.
Nevertheless, the decline in precious metals prices at the beginning of the week is limited due to the increasing risks of escalating Middle East hostilities. This traditionally increases the attractiveness of the white metal as a safe-haven asset.
Silver prices are showing a broad correction on the D1 timeframe.
In terms of wave analysis, the price is in the process of forming the second descending wave on the H4 timeframe. Bulls Power indicator volumes (standard values) are in the positive zone. This indicates a possible change of trend towards buying and the formation of a new upward wave.
Signal:
Short-term prospects for silver suggest selling/buying.
The target is at the level of 24.100.
Part of the profit should be taken near the level of 23.400.
A stop-loss could be placed at the level of 21.850.
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.
