Silver Dropped As US Dollar Recovers As Fed Maintains The Hawkish Rhetoric.

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Silver Dropped As US Dollar Recovers As Fed Maintains The Hawkish Rhetoric.

Silver faced a decline of -0.48%, settling at 70269, attributed to the recovery of the US Dollar following the Federal Reserve's maintenance of a hawkish rhetoric. The FOMC Minutes from the January meeting revealed concerns among most policymakers about the potential repercussions of premature rate cuts, with some highlighting the risks associated with an excessively restrictive monetary policy stance. This perspective may have contributed to the market's response. In the labour market, the number of people claiming unemployment benefits in the US dropped to 201,000, well below market expectations and marking the lowest count in five weeks. 

Continuing claims also decreased, suggesting an improved environment for unemployed individuals to find suitable jobs. The labour market dynamics continue to be a crucial factor influencing the Federal Reserve's monetary policy decisions, as the central bank aims to gauge inflation and economic conditions. The Chicago Fed National Activity Index for January indicated a contraction in activity, decreasing to -0.30 from the previous month. This contraction was observed across three of the four broad indicator categories, reflecting the challenges faced by the economy during that period. 

From a technical standpoint, Silver is undergoing long liquidation, with a drop in open interest by -2.13% to settle at 21532. Despite the decline in prices by -340 rupees, the market finds support at 69880, and a breach below could lead to a test of 69495. On the upside, resistance is likely at 70925, and a breakthrough could see prices testing 71585.

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