Silver prices firmed on Monday, aided by a weaker dollar. This was possible due to dovish remarks from U.S. Federal Reserve Chair Jerome Powell, which strengthened expectations of an interest rate cut in September. Last week, the white metal prices showed significant growth and rose 2.73%.
Powell on Friday endorsed an imminent start to rate cuts, saying further cooling in the job market would be unwelcome. The dollar hovered near its lowest level in 13 months, making precious metals cheaper for other currency holders, while benchmark 10-year Treasury yields also eased.
Silver is currently in a consolidation phase as traders await an interest rate cut decision in September. According to CME FedWatch, there is a 64% chance of a 25 basis point cut and a 36% chance of a 50 basis point cut. Typically, low interest rates increase the attractiveness of the precious metal because it doesn’t generate interest income.
Meanwhile, India’s silver imports will nearly double this year due to rising demand from solar panel and electronics manufacturers. The surge in industrial demand, coupled with the growing role of silver as a safe haven asset, provides strong support for prices.
On the technical level, silver prices on the H2 timeframe are forming a new upward trend. The Bulls Power and Bears Power indicators (standard values), which are in the positive zone, confirm the strength of the bullish sentiment and signal a move towards buying. According to the wave analysis, the price is forming the third ascending wave. Breaking through the top of the first wave at 29,960 will strengthen the current ascending wave.
Signal:
The short-term outlook for silver is to buy.
The target is at the level of 32.500.
Part of the profit should be fixed near the level of 30.800.
The Stop loss could be placed near the level of 27.850.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
