SILVER Analysis
Afternoon: Silver Prices Decline Amid Expectations of Fed Rate Cuts
Highlights:
- Silver prices fall as US data suggests Fed rate cuts; 78% chance of September cut, focus on Powell's testimony and inflation data.
- Key data: German Trade Balance, Sentix Investor Confidence; support at $30.50, resistance at $31.60.
- Strategy: buy on drop around $30.90, target $31.40, stop loss below $30.60.
Overview
Silver prices fell after rising the previous day, as lower U.S. economic data increased the likelihood of a Federal Reserve interest rate drop in September. The unemployment rate has reached a two-and-a-half-year high of 4.1%, indicating a weakening labor market. This week, the market is focused on Fed Chair Jerome Powell's semi-annual Congressional testimony, comments from several Fed officials, and US inflation statistics. According to CME's FedWatch Tool, markets expect a 78% chance of a Fed rate cut in September, with traders also pricing in an increased possibility of a second rate cut in December.
Key Economic Data to Watch
- Euro Zone: German Trade Balance, Sentix Investor Confidence.
Technical Analysis and Trading Strategy
- Support and Resistance Levels:
- Silver (Spot): Support at $30.50 and resistance at $31.60.
- Silver MCX: Support at ₹92,000 and resistance at ₹95,000.
- Action: Buy on a drop around $30.90, targeting $31.40, with a stop loss below $30.60.
Conclusion
Investors are closely monitoring Fed Chair Powell's testimony and upcoming US inflation data, which are expected to provide more clarity on the Federal Reserve's monetary policy direction. The current economic indicators and market sentiment suggest potential volatility in silver prices as traders adjust their expectations based on new information.
Support and Resistance Levels:
