FUNDAMENTAL OVERVIEW
Silver jumped into a new all-time high today following Trump’s escalation over Greenland. In fact, the US President threatened to impose 10% tariffs starting on February 1 on the UK, France, Germany and a few other European countries unless the U.S. is permitted to buy Greenland. The tariffs will rise to 25% from June 1 in case of no deal.
As seen last year, tariff threats have been boosting precious metals on higher stagflation risks. In fact, high tariffs generally lead to lower growth and higher inflation. Stagflation is the best environment for silver.
Everyone is now waiting for the famous TACO ("Trump Always Chickens Out") trade. The market's focus in now on this latest escalation, so monitoring the developments will be key and will offer trading opportunities.
The risk sentiment will likely stay on the defensive until we get some clear de-escalation from Trump. If things escalate further, we should see another strong rally. Conversely, if we end up once again with Trump easing his threats, silver will likely drop back to the previous levels.
SILVER TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that silver jumped into a new all-time high today following Trump’s escalation over Greenland over the weekend. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline to position for a rally into new all-time highs. Such a big pullback will likely require de-escalation and/or strong US data.
SILVER TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see that the price has been consolidating around the highs recently as traders awaited new catalysts. This new development gave silver a boost, but the buyers will want to see a break above the 94.00 resistance to increase the bullish bets into new highs. The sellers, on the other hand, will likely step in around these levels with a defined risk above the high to target a drop back into the 86.50 support.
SILVER TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see that the price is forming what looks like a bullish flag right at the resistance. The buyers will want to see the price breaking to the upside to pile in for a rally into new record highs, while the sellers will look for a downside breakout to increase the bearish bets into the 86.50 support. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the weekly US ADP jobs data. On Thursday, we get the latest US Jobless Claims figures. On Friday, we have the US Flash PMIs. Watch out also for headlines and Trump’s posts on Truth Social regarding Greenland as the market’s focus remains on this latest trade war.
