Silver has started the new week steadily, remaining above the $23.50 threshold. We should note that silver has posted a massive rally in the last two months, gaining around 25%. This bullish movement is showing the interest of investors for the precious metal.
After having been in red for months, the YTD performance recently turned in green and silver is posting, so far, a tiny 1% gain from January. This is particularly remarkable if we consider that in early October the YTD performance was still in double-digit decline.
The overall scenario remains supportive, while investors are betting on solid demand in the next few years. Moreover, silver recovery has been lifted by the weakness of the greenback, positive news coming from China and also the expectation that the US has reached its inflation peak. Therefore, a lot of attention is being placed on this week’s macroeconomic data, which include the CPI for the EU, US and UK, followed by the central bank’s decision of the Federal Reserve, ECB and Bank of England.
All of them are expected to raise rates by 0.5%, but the attention is focused on the statements which will be released alongside these announcements. Dovish comments could further help silver, while hawkish rhetoric would be a negative catalyst.
From a technical perspective, we should note that the recent rally could trigger a consolidation phase. In other words, markets could need time for digesting the strong price increase just seen. Therefore, some lateral movement and potentially modest decline could still be considered part of the recovery process for silver, without changing the main positive trend.
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