KEY POINTS:
- Silver remains supported amid geopolitical tensions, weak US data and dovish Fed expectations
- Risks in the short-term include the US NFP report on Friday and potential US Supreme Court decision on tariffs
- Big picture uptrend should remain intact amid the Fed’s dovish reaction function
- Price chart shows a possible double top in the making
FUNDAMENTAL
OVERVIEW
Silver has been the hottest
asset of 2025. The fundamentals are the same as for gold, but silver is more volatile. The precious metal continues to be supported by the geopolitical
tensions, the weak US data and the dovish Fed expectations. The bullish momentum remains intact, but we have
two important events on Friday that could challenge that.
In fact, on Friday we get
the latest US NFP report and while the previous report might have been taken
with a pinch of salt due to shutdown related issues, this one should give us a
clearer picture. Strong data might lead to a bigger pullback as traders push
back on expectations of an imminent Fed rate cut, while soft figures should
keep on supporting the upside.
Moreover, yesterday the US
Supreme Court scheduled Friday as an opinion day, which could see a decision on
Trump’s tariffs. In case the tariffs are struck down, silver will likely fall
amid easing stagflation risks. On the other hand, if tariffs are kept in place,
it shouldn’t change much although it would keep the upside intact.
In the bigger picture, silver
should remain in an uptrend as real yields will likely continue to fall amid
the Fed’s dovish reaction function. But in the short term, a hawkish repricing
in interest rate expectations could weigh on the market.
SILVER TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that silver recovered all the losses from last week’s selloff and touched
the all-time highs. Is this going to be a double top or will we see new record
highs ahead? The sellers will likely step in around these levels with a defined
risk above the all-time high to position for a drop into the 69.00 handle. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into new all-time highs.
SILVER TECHNICAL ANALYSIS –
4 HOUR TIMEFRAME
On the 4 hour chart, we can
see that we have an upward trendline defining the bullish momentum. If we get a
pullback into the trendline, we can expect the buyers to lean on it with a
defined risk below it to position for a rally into a new all-time high. The
sellers, on the other hand, will look for a break lower to increase the bearish
bets into the 69.00 handle.
SILVER TECHNICAL ANALYSIS –
1 HOUR TIMEFRAME
On the 1 hour chart, we can
see that the price broke below the upward trendline that was defining the
bullish momentum on this timeframe. This could be a signal of a loss of
momentum and a bigger pullback in the cards. The sellers piled in on the break
targeting a drop into the major trendline. The buyers have a mixed picture here
and will need to wait for a pullback into the major trendline or a break above
the all-time high.
UPCOMING CATALYSTS
Today we have the US ADP, the US ISM Services PMI and the US Job Openings
data. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we
conclude the week with the US NFP report and potential US Supreme Court
decision on Trump’s tariffs.
This article was written by Giuseppe Dellamotta at investinglive.com.