Fundamental Overview
Silver, much like gold, has been rallying strongly recently with the price now trading near all-time highs. There’s nothing fundamental driving the price action as a short squeeze looks like the most reasonable culprit.
We had soft weekly ADP data on Tuesday but if that was the reason, we would have seen a stronger reaction already on Tuesday not the day after.
The reopening of the US government will bring back the key US data like the NFP and CPI, and those will be key risk events for silver.
Strong US data, especially on the labour market side, should keep weighing on gold as it would keep the market speculating on rate cuts pause. Conversely, weak data is likely to support the precious metal as it would give the Fed more reasons to keep cutting rates.
In the bigger picture, silver should remain in an uptrend as real yields will likely continue to fall amid the Fed’s dovish reaction function. But in the short term, a further hawkish repricing in interest rate expectations should keep weighing on the market.
Silver Technical Analysis – Daily Timeframe
On the daily chart, we can see that silver is trading around all-time highs. This is where we can expect the sellers to step in with a defined risk above the all-time high to position for a drop into the major trendline around the 45.00 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new all-time highs.
Silver Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong support zone around the 49.50 level where we have also the minor upward trendline for confluence. If the price gets there, we can expect the buyers to step in with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the major trendline.
Silver Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another minor upward trendline defining the bullish momentum on this timeframe. The buyers are likely to lean on the trendline to keep pushing into new highs, while the sellers will look for a break lower to start targeting the 49.50 support next. The red lines define the average daily range for today.
