Uncertainty from Russia-Ukraine Situation Unable to Dispel Hope for Silver Strength

Uncertainty remains the keyword to decipher the current scenario, as investors are trying to predict the evolution of the situation between Russia and Ukraine.

Although silver’s volatility is declining, it is still above the levels seen in the second part of 2021.

Earlier this week, the Federal Reserve increased interest rates, with investors now expecting the US Central bank to continue to hike rates in the next few months. 

Checking the CME FedWatch Tool we can see that markets are pricing rates to be in the fork between 2 and 2.25% by the end of 2022. Of course, this will remain a crucial market driver for stock markets and for the precious metal sector.

Silver Analysis

The correlation between gold and silver is usually strong with the last few days being no exception. Following the decline of gold, the grey metal has fallen below $25, before rebounding to $25.50 in the last 24 hours. 

Despite having lost around 2% this week, the silver performance in 2022 is still largely positive, with a year to date gain of close to 9%.

Analysing the charts, we can find for the silver price a first resistance zone at $25.7. 

A surpass of this level could open space for the further rebound to $26.3-26.4, while the next key level would be placed at $27.2 – the high reached on the 8th of March. 

However, a decline below $25.3, could trigger a new bearish impulse, with a potential test of the $24.6-24.7 support zone.

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Carlo Alberto De Casa is an external Market Analyst for Kinesis Money.

He also writes as a technical analyst for the Italian newspaper La Stampa.

Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018.

This report is not an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance.