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USD Rally Weighing on Silver
Silver prices remain heavy this week with the market still sat on support at the 22.3205 level, underpinned by the bull channel lows also. The recent uptick in USD has weighed heavily on silver, seeing futures prices dropping around 11% from the July highs. The majority of this move has been fuelled by a shift in Fed expectations as well as safe-haven support for USD. In terms of the Fed, the market is now looking a little more uncertain over the path of rates into year-end.
Shifting Fed Expectations
At the start of July, the Fed was no longer forecast to hike again, with focus in stead on projected rate cuts next year. However, pricing now looks more mixed with rate cut projections pushed back a little. While this narrative remains in place, particularly if rate hike expectations grow stronger, silver is likely to continue lower near-term.
US Retail Sales Due
Looking ahead today, focus will be on the latest set of US retail sales numbers. Expectations are for both core and headline to rise to 0.4% from 0.2% prior which, if confirmed or beaten, should keep USD upside intact, weighing on silver prices. It would likely take a sharp downside surprise to derail USD here but if we do see such results, silver will likely recover near-term while USD comes off.
Technical Views
Silver
The reversal lower in silver has seen the market breaking down below the 24.0073 level. Price is now testing the bull channel lows and 22.3205 level support. This is a key region for the market and should we break lower here there is room for a deeper drop down towards 20.6398 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.