Silver on its way to 25,800 amid lower geopolitical tensions and global economic uncertainty

22 April 2024 58
Silver on its way to 25,800 amid lower geopolitical tensions and global economic uncertainty

The silver price fell 0.6% on Monday amid easing geopolitical tensions in the Middle East. This led to a decrease in demand for safe haven assets. Traders are awaiting important data from the US, which could clarify the future monetary policy of the Federal Reserve (Fed).

 

Tensions between Israel and Iran intensified last week, causing international concern. However, concerns are now beginning to subside and attention is shifting to US economic indicators.

 

Investors expect Friday's PCE price index to show an increase from 2.5% in February to 2.6% last month. Confirmation of the forecast will reinforce the Fed's view that rate cuts should be postponed. This could put pressure on silver as it doesn’t generate interest income.

 

The silver market is entering its fourth year of structural deficits amid rising industrial demand in 2024, according to Metals Focus research produced for the Silver Institute. Macquarie estimates that white metal shortage will continue over the next five years, although existing inventories are still offsetting current shortages.

 

Nevertheless, uncertainty in the global economy, particularly in the electronics sector, a key sector for silver consumption, could limit the rise in metal prices for the foreseeable future. For silver prices to exceed $30 per ounce, a recovery in production and increased demand for solar energy are needed.

 

From a technical point of view, the silver price is forming an uptrend on the D1 timeframe.

 

Divergence of the RSI (standard values) on the H4 timeframe indicates a possible change in price trend.

 

Strong data this week could lead to a test of the support level at $25,800 per ounce.

 

Signal:

The short-term outlook for silver is to sell.

The target is at the level of 25,800.

Part of the profit should be fixed near the level of 27,000.

The Stop-loss could be placed near the level of 29,800.

 

The bearish 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.

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