Silver price is declining on Monday amid a stronger dollar. This week, investors are awaiting comments from Federal Reserve officials and the release of economic data to get further signals on the US interest rate trajectory.
The dollar strengthened due to an incident involving US presidential candidate Donald Trump. This event increased his chances of winning the election and added to political uncertainty in the markets. A stronger dollar makes the precious metal more expensive for foreign buyers.
Fed Chairman Jerome Powell is scheduled to deliver a speech later on Monday. Other central bank officials will make comments during the week. Also to be released in the coming days are US retail sales, industrial production for June and weekly jobless claims. Any changes in industrial demand or the outlook for the global economy could be an additional catalyst for the white metal.
The divergence between silver and gold is intact. While the yellow metal is benefiting from increased confidence in the Fed's upcoming rate cuts, silver investors have been more cautious. This suggests a strategy of hedging against a widely expected rate cut in September, which currently has a 96% chance according to CME FedWatch Tool.
From the technical point of view, the silver price is in a broad correction on the H4 timeframe. Contradictory signals appear on the chart as the price is close to the psychological level of $30. However, the divergence of the RSI (standard values) signals a possible price decline and a broad correction.
Signal:
The silver's short-term outlook is to sell.
The target is at the level of 28.70.
Part of the profit should be fixed near the level of 30.000.
The Stop-loss should be placed near the level of 32.400.
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.
