Selling silver at 24.600 is reasonable after Fed holds interest rates

The silver price remains steady even after the Federal Reserve (Fed) kept interest rates unchanged at the previous level of 5.5% the day before. The regulator also noted the recent disappointing inflation data, which may delay rate cuts. Fed Chairman Jerome Powell expressed his uncertainty about an imminent decline in inflation.

On this background, according to CME FedWatch, 91% of investors expect the U.S. central bank to keep interest rates unchanged in June. The scenario of “higher and longer” for interest rates reduces the attractiveness of holding non-yielding gold and silver.

Meanwhile, the Institute for Supply Management (ISM) on Wednesday reported that the manufacturing PMI fell to 49.2 last month from 50.3 in March. March's figures were the highest since September 2022 and for the first time since then above 50. When the PMI is above 50, it indicates growth in the manufacturing sector, which accounts for 10.4% of the economy. Therefore, the silver price has slightly dropped, as the metal is actively used in industrial production.

Investors now expect Friday’s report on U.S. Non-Farm Payrolls. On Wednesday, the ADP employment report showed an unexpected increase in the number of jobs in April, which exceeded expectations. The number of job openings in the U.S. for March was also released. The data showed a decline to a 3-year low along with a drop in the number of layoffs, according to the report from the U.S. Department of Labor.

On the technical level, silver prices exited the uptrend on the D1 timeframe.

In terms of wave analysis, the price is forming the third descending wave on the H4 timeframe. Breaking through the top of the first wave at the level of 26.650 has already taken place. This indicates a potential strengthening of the downward momentum. The Bears Power indicator (standard values) is in the negative zone, confirming the sell-side movement.

Signal:

The short-term outlook for silver suggests selling. 

The target is at the level of 24.600.

Part of the profit should be taken near the level of 25.750.

A stop-loss could be placed at the level of 28.100.

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