[ad_1]
Silver extended its correction from recent highs above $ 24 and we could see even lower prices in the coming weeks if the US dollar stays strong. Demand for the dollar continues to grow but remained below its weekly high of 0.86 against the euro.
Fundamental Analysis: Fed Chairman Jerome Powell said rates could rise faster than expected
Since the beginning of September the silver price has weakened by more than 5% and reached the price levels we had seen in November 2020. The US Federal Reserve announced on Wednesday that it could reduce its monthly bond purchases as early as November 2021. which had a positive impact on the US dollar, and the main force behind the fall in silver prices is the appreciation of the US dollar.
Are you looking for fast news, hot tips and market analyzes? Sign up for the Invezz newsletter today.
“The US Federal Reserve is preparing the ground to possibly recall some of the exceptional support it provided to the economy during the pandemic. The timing and pace of the upcoming reduction in bond purchases are not intended to be a direct signal as to when the rate hike will occur, “Fed chairman Jerome Powell told reporters on Wednesday.
The US Federal Reserve switched to a more restrictive tone, and Fed chief Jerome Powell said interest rates could rise faster than expected next year. Jerome Powell also said the Fed has hit its inflation target, while more than half of Fed members believe the economy has hit the employment target.
The global economy is recovering, the US unemployment rate fell to 5.2% in August and the rapid price increases are also a reason to raise interest rates. The prospect of interest rate hikes has a positive impact on the US dollar, and anyone interested in investing in precious metals such as silver should have the US dollar on their “watch listâ€.
Technical analysis: $ 20 represents a strong level of support
If you want to invest in commodities like silver, you should keep in mind that the risk of a further decline has not yet been averted.
The key support level is currently at USD 20 and if the price falls below this level it would be a clear “sell signalâ€. The next price target could be around $ 18 or even less.
On the other hand, if the price jumps above $ 25 it would be a signal to trade silver and we have the open road to $ 27.
summary
The silver price remains under pressure after the US Federal Reserve reported that it could reduce its monthly bond purchases as early as November. The main driving force behind the slide is the appreciation of the US dollar, and investors will continue to watch out for comments from the US Federal Reserve.
Where can you buy now
To make investing easy and hassle-free, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognized worldwide and safe to use:
- toro, trusted by over 13 million users worldwide. Register here>
- Capital.com, simple, easy to use and regulate. Register here>
[ad_2]
