Silver Could Retest Highs
2022.04.04 11:41
Silver against the US dollar has been relatively stable since the middle of March, around $25. Participants generally expect two double-step hikes from the Fed into the middle of June, which has hurt demand from investors. Still, the outlook for economic growth and the demand from industry seems cautiously optimistic.
Markets seem to be content that the Fed is now taking inflation seriously and will try to bring it down, so the focus seems to have shifted more to economic indicators. That situation is potentially suitable for silver because most of its demand comes from an industry of some sort. Participants seem to be discounting the current wave of COVID in China.
Silver daily chart.
As of the time of writing, the chart doesn’t suggest immediate gains because ATR has declined from its high in early March, and volume is also closer to the norm in the fourth quarter of 2021.
The confluence of the 50 SMA and the 23.6% weekly Fibonacci retracement around $24.50 could be the source of a new upward wave. Still, traders should probably seek a confirmation from an engulfing pattern or something similar.
