Markets revise silver price expectations downward

The price of silver fell below $33.70 after hitting a 5-month high during early trading on Monday. Markets began to re-evaluate the global trade standoff, limiting the upside potential of the precious metal.

The situation escalated when the European Union imposed a 50% duty on American whiskey shipments in response to US tariffs on steel and aluminum last week. In turn, President Donald Trump, in a Truth Social, warned about the possibility of a 200% duty on imports of European wine and other spirits. However, markets have already partially factored these risks into the prices.

In addition, strong industrial demand and reduced supply are not yet providing sufficient support for the prices. According to WisdomTree, a considerable amount of silver reserves are held by investors. This may result in active sales of the metal if the economic situation worsens.

The growth of the US dollar may put additional pressure on silver. February retail sales data is expected to show an increase of 0.7%. If the actual figures exceed the forecast, it will strengthen the dollar and put more pressure on the price of the white metal.

Markets also await Wednesday's meeting of the Federal Reserve (Fed) and Jerome Powell's speech afterward.

From a technical point of view, silver prices are forming an upward correction trend on the daily chart (D1). However, the Relative Strength Index (RSI) (standard parameters) suggests that the momentum may weaken and a decline would follow due to divergence.

At the same time, the third ascending wave is almost completed on the hourly timeframe (H1), while the prolonged divergence on the RSI increases the probability of moving downward.

Signal:

The short-term outlook for silver suggests selling. 

The target is at the level of 30.900.

Part of the profit should be taken near the level of 32.600.

A stop-loss could be placed at the level of 35.400.

The bearish scenario is short-term, so a trading volume should not exceed 2% of your balance.