Silver Prices Fell As Dollar Rose Amid Worries About Weakening Demand In China

  • Commodities Analysis

Silver yesterday settled down by -0.39% at 60635 as the U.S. dollar rose amid worries about weakening demand in China and repeated rate hikes by the Federal Reserve to cool inflation. The Federal Reserve will downshift in December to deliver a 50-basis-point interest rate hike, but economists polled by Reuters say a longer period of U.S. central bank tightening and a higher policy rate peak are the greatest risks to the current outlook.

Global demand for silver is expected to rise 16% this year to 1.21 billion ounces, creating the biggest deficit in decades, according to the Silver Institute. Use of silver by industry, for jewelry and silverware, and for bars and coins for retail investors were all forecast to reach record levels, the institute said. Automakers are using more silver as the number of electronics in vehicles increases, but the sector accounts for only around 5% of total demand. Solar panels account for around 10% of silver demand. Demand in India almost doubled in 2022 as buyers took advantage of low prices to replenish stockpiles drawn down in 2020 and 2021. The amount of silver stored in vaults in London and New York monitored by the COMEX exchange and the London Bullion Market Association has fallen by around 370 million ounces – or 25% – this year.

Technically market is under long liquidation as the market has witnessed a drop in open interest by -3.44% to settle at 11186 while prices are down -240 rupees, now Silver is getting support at 60262 and below the same could see a test of 59888 levels. Resistance is now likely to be seen at 60912, a move above could see prices testing 61188.

Trading Ideas:
# Silver trading range for the day is 59888-61188.
# Silver prices fell as the U.S. dollar rose amid worries about weakening demand in China and repeated rate hikes by the Federal Reserve to cool inflation.
# Fed to lift rates by 50 basis points, but peak policy rate may be higher
# Global demand for silver is expected to rise 16% this year to 1.21 billion ounces

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