Silver Dropped As The Dollar Firmed Up As Investors Awaited Key Inflation Readings.

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Silver Dropped As The Dollar Firmed Up As Investors Awaited Key Inflation Readings.
Credit: © Reuters.

Silver recorded a decline of -0.41%, closing at 70770, influenced by a strengthening dollar as investors awaited crucial inflation readings in the U.S. and Europe for market direction. The new estimates of the US fourth-quarter GDP revealed a 3.2% expansion, slightly below the previous estimate of 3.3%, indicating the resilience of the U.S. economy amid restrictive interest rates. However, recent releases suggested some softening, with durable goods orders contracting sharply and new home sales rising less than expected despite downward revisions in earlier months.

Market sentiment is divided on the Federal Reserve's actions, with over 60% of futures showing expectations of an interest rate cut by June. The latest CPI and payroll reports have led some market players to postpone their bets on a rate cut to the third quarter. The US trade deficit in goods widened in January 2024 to $90.20 billion, while wholesale inventories fell by 0.1% month-over-month, missing market estimates.

Technically, the silver market is witnessing fresh selling, marked by a significant increase in open interest by 16.93% to settle at 26939, accompanied by a price decline of -288 rupees. Key support levels are identified at 70505 and 70245, with resistance anticipated at 71025 and a potential breakthrough leading to a test of 71285. The market appears responsive to economic data releases and inflation indicators, with investors closely monitoring the Federal Reserve's policy outlook. Traders should remain attentive to support and resistance levels for potential shifts in market dynamics.

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