The recent price action has formed a strong base of support, although the prevailing downtrend suggests that sellers may emerge around these resistance levels. The technical momentum indicators are showing the first signs of reversal, with increasing volume supporting the upward move.
What drives silver’s price action?
The dollar’s pullback from a one-year high has substantially supported silver prices, making the metal more attractive to international buyers. Monday’s session saw an impressive gain of 3.05%, indicating strong buying momentum as market participants who had been waiting for stabilization began taking positions.
Treasury yields have also retreated from recent highs, adding to silver’s appeal as an alternative investment. Market liquidity has improved significantly, with trading volumes indicating renewed institutional interest in the precious metals sector.
How will global events affect price movement?
The escalation of the conflict between Russia and Ukraine, marked by Russia’s largest airstrike in almost three months, has increased silver’s appeal as a safe haven. Furthermore, market sentiment is driven by Federal Reserve policy expectations, with current prices pointing to a 58.9% probability of a 25 basis point rate cut in December.
The potential for shifts in monetary policy, combined with geopolitical tensions, creates a supportive environment for precious metals. Traders are closely watching the Fed’s upcoming official speeches for more insight into the central bank’s interest rate path, which could further influence the direction of silver prices.
Market forecast
Based on the technical setup and fundamentals, silver appears positioned for further gains in the near term, targeting the $32.275 to $32.89 range. However, traders should remain cautious as the main trend remains bearish, indicating potential resistance at higher levels.