Silver Gained As The Dollar Fell And Treasury Yields Narrowed Ahead Of Key Data

(January 25, 2024 - Kedia Advisory, Commodities News)        

Silver prices recorded a significant gain of 1.29% yesterday, closing at 71869, buoyed by a weakening dollar and a narrowing of treasury yields ahead of key economic data releases. The upcoming fourth-quarter US GDP and the PCE Index, the Federal Reserve's crucial inflation measure, are expected to provide further direction to the market. The S&P Global (NYSE: SPGI ) US Composite PMI for January 2024 surged to 52.3, indicating the most rapid rise in business activity since June 2023. Additionally, anticipation of monetary policy decisions from major central banks, including the European Central Bank (ECB) and the Bank of Japan (BoJ), contributed to market dynamics. The ECB's upcoming monetary policy decision and indications from the BoJ Governor suggesting a potential interest rate increase in April influenced traders' sentiments.

From a technical perspective, the market is undergoing short covering, with a 13.68% drop in open interest to settle at 26303. Silver is currently finding support at 71095, and a breach below this level could lead to a test of 70315. On the upside, resistance is expected at 72410, and a move beyond this level may see prices testing 72945.

Traders should closely monitor economic data releases, central bank decisions, and geopolitical developments, as they are likely to play pivotal roles in determining the silver market's trajectory in the near term. The positive momentum observed in silver prices is supported by a combination of factors, and investors will be closely watching upcoming economic indicators for further insights.