Posted 28th July 2023

Silver Price News: Silver Price Declining After Solid US Economic Data

The FOMC meeting on Wednesday generated little volatility in silver prices. However, the following day, we witnessed a decline in the silver price, attributed to the solid US economic data, which led to an uptick in the US dollar. Investors now perceive a higher likelihood of one more rate hike from the Federal Reserve before the end of the ongoing tightening cycle.

While the conclusion of this unprecedented rate hike process is approaching, it has yet to be confirmed.

In the meantime, the ECB increased rates from 4.00 to 4.25%. However, ECB President Christine Lagarde did not provide a clear indication of the central bank’s plans at the end of the summer, leaving open the possibility for either one more rate increase or a pause at September’s meeting.

From a fundamental perspective, the strength of the US economy is a positive signal for silver, given that approximately half of its demand is linked to the industrial sector. Despite this, expectations for higher rates for a more extended period and the increased chances of an additional rate hike in the US contributed to yesterday’s decline in silver prices.

From a technical point of view, silver has lost the strength shown last week, and we should now pay attention to the key level of $24.1-24.2, mentioned in previous reports.

A solid rebound from these levels could reignite the recovery of silver, pushing the price back towards the region of $25. Conversely, if these levels are broken, the next support zones are at $23.5 and $23.1.


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