The declining volatility in the silver markets yesterday brings positive news. The silver price remained flat in the range of $21.65-21.9, confirming the recovery posted earlier this week when silver jumped from the 7-month low of $20.7 to the current levels.
Although the tensions in the Middle East are adding uncertainty to the geopolitical and economic scenario, silver has managed to rebound and hold on to the gains. From a technical point of view, a clear break above $22 would represent another positive signal, opening the way to the next resistance zone of $22.2 and $22.5.
In the last few days, the dollar dip – after the recent rally – and a modest decline in yields have been supportive of the grey metal. Add to this, investors believe a peak in US interest rates is now closer than ever.
That said, silver still has plenty of obstacles. An economic slowdown could increase fears of declining industrial demand, which accounts for around 50% of the total silver global demand.
At the same time, this scenario would force the Federal Reserve to reduce the rates from the record levels they’re at; this could represent positive news for silver.
The two crucial sectors of silver industrial demand (photovoltaic and electric car components) appear to be in an upward cycle, given the growing attention to environmental themes.
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.
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