Silver Analysis
Afternoon: "Silver's Rally Amid Economic Uncertainty: Navigating Trade Tensions and Technical Signals"
Highlights:
- Silver climbs to $33.90 amid safe-haven demand and expectations of Fed rate cuts.
- Key support levels at $33.40 and resistance at $34.50 guide tactical entry and exit points.
- Upcoming economic data and persistent trade tensions are pivotal for future silver price movements.
Overview:
The recent rise in silver prices to $33.90 reflects its status as a safe-haven asset amid heightened geopolitical and economic uncertainty. Investors have been drawn to silver following mounting tariff tensions and growing expectations of Federal Reserve rate cuts, triggered by weaker-than-expected US inflation data. This trend is compounded by trade tensions, notably after President Trump's threat of 200% tariffs on European wines, champagnes, and other alcoholic products in response to the EU's imposition of a 50% duty on American whiskey. In a provocative statement, U.S. Commerce Secretary Howard Lutnick even remarked that a recession might be "worth it" to implement Trump's economic policies.
From an economic perspective, the US data has been mixed. Producer prices for February came in unexpectedly flat, while consumer inflation increased by only 0.2%, a figure that fell short of market expectations. Additionally, the recent decline in jobless claims underscores the resilience of the labor market, supporting the outlook for the economy. Meanwhile, upcoming key economic indicators—including the German ZEW Economic Sentiment from the Euro Zone and US Building Permits, Housing Starts, and Capacity Utilization Rate—are anticipated to further shape market sentiment and could influence silver's trajectory.
Technical View:
Technical further supports the bullish view for silver. In the spot market, silver prices have found support at $33.40 and are challenged by resistance at $34.50. Similarly, in the MCX market, support is observed at 99,200 with resistance at 102,000.
Trade Action:
Based on these levels, a tactical approach is recommended: buying on a dip around $33.70, with a target of $34.30 and a stop loss below $33.40.
Support & Resistance Levels:
