Silver prices fell by -0.05% to settle at 72342, as investors waited for more information about the United States (US) Federal Reserve’s (Fed) policy meeting and specifically when interest rate cuts might occur.
The geopolitical environment contributed to the allure of the precious metal as the United States President Joe Biden threatened to exact revenge for attacks on the US military in the vicinity of northeastern Jordan, despite Iran’s denial of any role in the aerial drone attacks.
As tensions rose, safer assets became more appealing while riskier assets encountered difficulties. Regarding the economy, the JOLTS report surprisingly showed an increase in job openings to 9 million, indicating promising developments in the labour market.
Furthermore, the CB consumer confidence index, which measures consumer optimism, rose to its highest point since the end of 2021.
Federal Reserve’ Expected to Hold Rates, Silver Market Foresees 1% Global Demand Increase in 2024
Despite these encouraging signs, the Federal Reserve is expect to keep interest rates in the 5.25%-5.50% range for the 4th time in a row, owing to persistently low inflation.
Politicians are still dubious, though, about whether inflation can sustainly return to the 2% goal. Based on the fundamentals of the silver market.
It is anticipat that the demand for silver will rise by 1% globally, primarily due to the resilience of industrial end-users and a rebound in the demand for jewellery and silverware. It is anticipat that industrial fabrication of silver will increase by 4% in 2024 to a record 690 million ounces.
The world’s silver supply is predict to increase by 3% overall in 2024. Mostly due to a rebound in mine output, and reach an eight-year high of 1.02 billion ounces.
Technically speaking, the silver market is in the midst of a protracted liquidation, as shown by the -0.8% decline in open interest that led to the market closing at 23182. There has been a -35 rupee drop in price.
With a potential test of 71670 levels on the downside, silver prices finds support at 72005. Resistance is seen at 72690 on the upside, and a break through there might result in a test of the 73040 levels.