Silver has fallen below $24 in early trading, but this could be a consolidation following its recent rally. Last week silver gained over 4%, significantly outperforming gold, which posted a fractional decline.
Although the new week began in the red, this decline can be attributed to the rebound of the USD and the correction of gold, which is often followed by the silver price.
From a technical point of view, the major trend for silver still appears solid (and probably better than that of gold in the short term). If silver can hold above $23.5, there could be space for a new rebound to the resistance zones of $24 and $24.2, where the recent tops are placed. Conversely, a fall below $23.25 and particularly a new decline below $22.85 would signify a proper inversion for the precious metal.
Investor attention in the last few hours has mostly focused on the oil price, with West Texas Intermediate and Brent up 5%, after OPEC decided to cut output by over one million barrels per day. It is as yet unclear what impact this decision could have on central banks’ rates policy, or the effect on the precious metals market. On one side, higher energy costs could revamp inflation, and on the other hand, it could increase the risks of a recession.
With a credential background in Economic Finance and International Exchange (MA), his critical analysis of gold and silver markets’ performance is frequently quoted by leading publications, week on week.
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