Silver dropped on profit booking as traders bet on tightening campaign from central banks

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  • Commodities News
Silver dropped on profit booking as traders bet on tightening campaign from central banks

 Silver experienced a 0.6% decline, closing at 74831, driven by profit booking as traders speculated on the end of major central banks' tightening campaigns and assessed the potential timing of interest rate decreases. The record-high prices earlier in the month were influenced by expectations of monetary easing from the Fed in the coming year. 

Signs of a cooling US labour market, including a drop in job openings and lower private employment figures, support this view. Investors are now eagerly awaiting the key US jobs report on Friday for further insights into the Fed's plans. In Europe, ECB's Isabel Schnabel signalled a shift in policy, citing a "remarkable" fall in inflation, indicating a departure from further rate hikes. Meanwhile, the US trade gap widened to $64.3 billion in October, the highest in three months, reflecting a rise in the goods deficit and a modest increase in the services surplus. However, a notable development was the unexpected annualized 1.2% fall in unit labour costs in the US nonfarm business sector for Q3 2023, surpassing the preliminary estimate and market expectations. 

Technically, the market is undergoing long liquidation, evidenced by a 4.53% drop in open interest, settling at 14612. With a price decrease of 448 rupees, Silver finds support at 74490, and a breach could lead to a test of 74145 levels. On the upside, resistance is likely at 75440, and a move above could prompt a further rally, testing 76045.

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