Silver, the white metal, has witnessed record movements over the past three years, as its price responds to global economic transformations and developments in the market. In recent days, silver prices have risen in the European market, reaching their highest level in three weeks, and approaching the record levels witnessed during the past three years.
This rise came as a result of the decline in the yield of ten-year US Treasury bonds, which prompted investors to search for another safe haven to invest, which increased demand for the precious metal such as silver. In addition, investment demand activity is likely to play a key role in this rise, as investors turn towards precious metals as a safe investment alternative in light of the current economic fluctuations.
As the white metal approaches achieving its largest weekly gain since early April, interest in its demand prospects is increasing, especially with hopes of improved levels of actual demand in the largest metal consuming country, China. This optimism is attributed to improving economic data in China and the recovery of economic activity after a period of slowdown.
Despite these positive developments, global market developments should be closely monitored, as changes in economic or political factors could lead to new fluctuations in silver prices.
A price outlook on the silver metal indicates the continuation of its positive movements during the recent period, as silver prices rose today by more than 1.5%, reaching $28.77 per ounce, which is the highest level since last April 19. Prices were at the beginning of the trading session at $28.34, then recorded the lowest level at $28.23.
This rise comes after silver prices ended yesterday’s trading with an increase of 3.7%, which is the second daily gain in a row
The importance of knowing the nature of financial markets
These positive movements reflect investors’ optimism in the precious metal and its ability to continue to achieve gains, but market developments and economic and political concerns that may affect prices in the future must be monitored.
On April 12, silver hit a three-year high of $29.80 an ounce, a long-standing record level. However, this rally did not last for long, as it entered a cycle of short-term bearish correction.
This downward correction reflects the nature of the market, which is characterized by sudden fluctuations, as the price of silver can be affected by multiple factors such as global economic developments, monetary policies
This downward correction shows the importance of understanding the nature of financial markets and the need for caution and alertness to rapid changes that could affect the performance of financial assets such as silver. During this week’s trading, which will officially end when prices settle today, silver prices have risen by more than 8.0% so far. Silver is expected to achieve its first weekly gain in the last three weeks, with the largest weekly gain since early April.
This rise reflects a positive shift in the market’s orientation towards precious metals as a safe haven for investors, especially in light of the current economic fluctuations and concerns related to inflation and monetary policies. Investment demand for silver may be strong this week as a result of concerns about the economic deterioration and its effects on global financial markets. It is important to closely monitor market developments over the coming days, as new events or surprising economic data could lead to changes in price trends.
According to the Chicago Mercantile Exchange’s Fed Watch tool, investors are currently pricing in about 50 basis point cuts in the federal funds rate this year
US bond yields
The yield on 10-year US Treasury bonds fell on Friday by 0.3 percentage points, a decline that continued for the second session in a row, and is close to touching a four-week low of 4.420%. This development fuels the rise in non-yielding assets, including precious metals such as silver.
The move in the US bond market comes as a result of jobless claims data that showed more signs of a slowdown in the US labor market, raising the odds of a Fed rate cut this year. This development casts a pessimistic shadow over the US economy and supports investor demand for safe assets and safe havens such as silver.
This trend in financial markets is expected to continue, reflecting economic tensions and growing concerns about slowing economic growth and its effects on global markets. Based on the latest unemployment data, futures prices for the probability of a cut in US interest rates rose by about 25 basis points next June from 8% to 9%, and the probability of a cut increased by about 25 basis points in July from 32% to 34%, and the probability of a cut rose in September. From 66% to 70%.
Trade balance data issued this week in Beijing showed a rise that exceeded market expectations in exports and imports during last April, in the latest data indicating an improvement in the recovery of the Chinese economy, which is in favor of improved expectations of improvement in actual demand in the largest consumer of commodities and metals. Expectations for silver’s performance are heading towards further gains, in light of expectations of US interest rate cuts as soon as possible. It is believed that more evidence of these cuts will lead to a further rise in silver prices.
Silver price analysis
High Ridge Futures Metals Trading Director David Meagher noted that the latest data shows slight weakness in the jobs market, supporting expectations that interest rate cuts by the Fed may occur sooner than previously expected. This scenario is expected to support gold and silver prices, as they are considered safe havens against economic and political fluctuations.
Silver price analysis indicates the continuation of the upward trend, as the price succeeded in achieving the expected target at the $28.00 level and breached it upward, which confirms the continuation of the upward trend. This breakout opens the door to further gains in the intraday and short term.
The next targets are expected to start at $28.90 and extend to $29.80. Accordingly, the expected scenario expects the continuation of the upward trend in the coming period, keeping in mind that breaking the $28.00 level may stop the upward impulse and place the price under corrective downward pressure again.
On the other hand, the expected trading range is expected to be between the support level at $28.00 and the resistance level at $28.80. This analysis reflects a continued bullish outlook, keeping the support at $28.00 as an important level to watch.
