Silver

Welcome to another edition of Technical Tuesday, a weekly report where we highlight some of the most interesting markets that will hopefully appease technical analysts and traders alike. In this week’s report, we will analysis gold and silver following last week’s bullish price action.

Gold and silver should remain supported on the dips amid peak interest rates narrative, with the latter likely to be more active given that we are in a positive market environment with stocks also rising.

US inflation turned out to be weaker than expected on both the headline and core fronts, and the market’s response was a swift one. We saw gold and silver rise, as yields and the dollar dropped, while index futures jumped with the pace of the rally gaining further momentum once the cash markets opened on Wall Street.

Precious metals prices have weakened over the last couple of weeks, following gold’s impressive +7% gains in October, and silver’s not-so-impressive 3% rise. Last month’s gains for gold were mostly driven by safe-haven demand as the flare up in the Middle East conflict saw investors rush out of risk-sensitive assets.

Thanks to the recent drop in bond yields and the dollar, both gold and silver are continuing to make back lost ground. The metals have been further supported by raised geopolitical risks, highlighted by gold’s breakaway gap at this week’s Asian open. The focus will remain on the dollar and yields with the release of key US inflation data today.

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Commodity trading has grown from a physical market to a largely digital one used by traders and investors to hedge positions and speculate on the future.

Tumbling bank stocks and a sharp slide in crude oil prices are highlighting financial stability and recession risks, underscoring our bullish silver outlook.

Compared to gold, silver has managed to rise very strongly on the session, up more than 5% so far.

Perhaps a bit of basing and consolidation is needed for the metal to gear up for a clean breakout above $1800.

Yesterday’s bullish price action suggests there could be further upside for silver over the near-term.

We are seeing some mild dollar selling ahead of FOMC, which is boosting the appeal of precious metals, yen and franc

Investors know that front-loading of interest rates around the world is only going to bring a potential recession – and therefore interest rate cuts – sooner.

Fears over a recession continues to drive financial markets, with commodities feeling the heat

gold has been a victim of a strong US dollar and rising bond yields, making this non-interest-bearing commodity less appealing for yield seekers.

Silver (XAG/USD) has tumbled over 19% since April 18th.

Covid reared its ugly head again on economic data, which saw China’s service PMI contract at its fastest pace since the pandemic.