Spot silver (XAG/USD) was trading with a negative bias at weekly lows in the $21.80 per troy ounce area on Thursday, down around 1.0% on the day, in wake of a hawkish ECB policy announcement that saw the bank signal a 25 bps rate hike next month plus the end of QE and a possible 50 bps hike in September depending on the development of the outlook for inflation.
But that still leaves XAG/USD well within recent ranges and support in the form of the 21-Day Moving Average at $21.80 continues to hold. Silver is thus currently close to the middle of a $21.50-$22.50ish range that has been in play since the end of May and traders will be looking to Friday’s US Consumer Price Inflation data and next Wednesday’s Fed meeting to see whether things get shaken up.
Silver bulls will be hoping for Friday’s inflation data to surprise to the downside and reinforce the idea that US inflation has now peaked, thus likely resulting in some further paring back of Fed tightening bets. This would weigh on US yields and the buck, both of which are typically positive for precious metals.
Meanwhile, the Fed is widely expected to raise interest rates by 50 bps at next week’s meeting (and again in July), so this shouldn’t come as a surprise to hurt silver. What will be more important is Fed Chair Jerome Powell’s commentary in the post-meeting press conference on the outlook for rate hikes beyond July.
If he starts sounding a little more confident that inflation is going to fall back from current elevated levels/concerned about the weakening US economy, then that, if CPI also surprised to the downside, could help XAG/USD rally into the $23.00-$23.50 area, where it would run into resistance in the form of its 50 and 200-Day Moving Averages.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.