FUNDAMENTAL
OVERVIEW
Silver has benefited recently from the sharp decline in oil prices as
expectations of a de-escalation and an earlier end to the conflict increased.
Lower energy prices eased inflation concerns and reduced expectations for more
aggressive tightening, creating a supportive environment for silver.
However, those expectations faded after the UN General Assembly, where
Trump reiterated that the US would make a deal with Iran after the November
elections. His remarks reduced optimism over a near-term resolution and
contributed to a renewed rise in oil prices.
Risk sentiment subsequently deteriorated, with silver coming under
additional pressure yesterday after the US Flash PMIs showed significantly stronger
than expected growth. The data triggered another hawkish repricing, sending real
yields higher and weighing on the precious metal.
The focus will remain on interest rate expectations and developments in the
Middle East. If markets begin to sense an earlier end to the conflict, or there’s
a surprise breakthrough in US-Iran negotiations, oil prices will resume the
decline, trigger a dovish repricing and providing support to silver.
Conversely, if the situation remains unresolved or things re-escalate,
crude oil will likely continue to move higher. This would reinforce
expectations for tighter monetary policy and higher real yields, creating
additional headwinds for silver.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that silver (CFD contract) pulled once again back to the
key 63.00 support. We can expect the buyers to step in around the support, with
a defined risk below it, to position for a rally into the 71.50 level. The
sellers, on the other hand, will want to see the price breaking lower to pile
in for a drop into the 55.00 handle next.
SILVER TECHNICAL ANALYSIS –
4 HOUR TIMEFRAME
On the 4 hour chart, we
have a minor resistance zone around the 65.00 level. If the price rebounds and
pulls back into the resistance, we can expect the sellers to step in there,
with a defined risk above the resistance, to position for a break below the
support. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into the 71.50 level next, with the 68.00
level as the first target.
SILVER TECHNICAL ANALYSIS –
1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor downward trendline defining the bearish momentum. We can expect
the sellers to lean on the trendline with a defined risk above it to keep
pushing into new lows. The buyers, on the other hand, will look for a break
higher to increase the bullish bets into the 65.00 resistance next. The red
lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we have the Trump-Xi meeting and the US Jobless Claims data, but the
focus will remain on US-Iran developments.
This article was written by Giuseppe Dellamotta at investinglive.com.