Prices of silver and other precious metals showed a sharp spike in volatility during Friday’s trading session. On Monday, the amplitude of fluctuations remains elevated, while there is no clear direction in the price movement. Anyway, late July lows near the 27.4 level were not updated, indicating a good opportunity to buy back the drawdown. In the near term, silver may return to 28.7.
Traders in the financial markets continue to analyze the report on the US labor market for July released at the end of last week. The data turned out to be much worse than expected, but conclusions are ambiguous. On the one hand, a slowdown in the US economy means weaker demand for commodities, which is negative for silver prices. At the same time, the Fed may start to ease monetary policy, with market participants now expecting a rate cut of 0.5% in September instead of the standard step of 0.25%.
Bank of America analysts see precious metals as a good investment option when interest rates are falling. However, they consider silver, not gold, to be the best choice. According to the bank’s experts, the white metal has the best fundamental support because of growing industrial demand. Bank of America forecasts that this year the average price of silver will be $28 per ounce, and in 2025 it will rise to $34.50.
WisdomTree analysts have a similar point of view. They have compared the dynamics of gold and silver prices, and the white metal outperformed the yellow one. This year, for every 1% increase in gold prices, silver rises by 1.4%. WisdomTree experts indicate a supply and demand imbalance in the silver market. Growing consumption volumes and decreasing stocks will support silver prices.
The 27.8–28.2 zone looks like an interesting place for long positions in silver. The rebound of silver prices has all chances to reach the level of 28.7.
Consider the following trading strategy:
Buy silver in the range of 27.8–28.2. Take profit – 28.7. Stop loss – 27.4.
