The strength of the U.S. Dollar has curbed the recovery of silver, which saw its price decline to $24.1 in early trading.
The main trend, however, remains positive for the grey metal. Indeed, when considering the fundamentals and the price moves of the last few days, we can consider this retracement as a physiological correction, after the rally seen in the first part of this week. The precious metal traded at around $22.7 per ounce last Friday, while at the closing bell on Wednesday evening it was changing hands at $24.3, or around 1.6 dollars higher (+6%). From this top, silver has lost only 1%, remaining above $24.
Some traders might have shaved their long position to take profit after the recent gains and to reduce their exposure ahead of Jerome Powell’s speech at the Jackson Hole Symposium. Indeed, investors are awaiting further indications from the Federal Reserve on its next monetary policy decisions. Any dovish comments could make space for further gains and the peak reached in late July, at $25-$25.2, could be within reach. However, we think it’s more likely that silver will consolidate around the current level – between $23.7 and $24.3 – before resuming its rally.
Carlo is an external market analyst for Kinesis Money. With a credential background in Economic Finance and International Exchange (MA), Carlo’s critical analysis of gold and silver markets’ performance is frequently quoted by leading publications such as Forbes, Reuters, CNBC, and Nasdaq.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.
