Silver prices rose on Thursday, with bullish traders looking at $33.39 at last week's high. Breaking this level can result in a surge from $34.87 to $35.40 tolerance, setting up the metal for potentially significant benefits.
Support is $32.53 and a key pivot is $31.81. The metal's intermediate and long-term technical trends remain positive, with 50-day and 200-day moving averages at $30.79 and $30.48, respectively.
The Federal Open Market Committee (FOMC) recently chose to hold the rates steady at 4.25% to 4.5%, citing inflation risks from Trump's economic policies. As the Fed shows it's reluctant to cut interest rates, interest-bearing assets could lose appeal and attract more investors' interest in non-Yielding metals such as gold and silver. Furthermore, discussions about suspending quantitative toning (QT) programs could potentially increase market liquidity, a scenario that historically benefits precious metals.
Inflation fear and tariff uncertainty drives demand
Trump's aggressive tariff strategy, including potential tariffs on new tariffs on wood, automobiles, semiconductors and drugs, is driving fears of the world trade war. These actions can drive inflation higher and reduce the purchasing power of Fiat currency. As a result, both gold and silver have gained traction as hedges against currency devaluation and market volatility.
Market Outlook: Silver Eye Breakout if Gold remains strong
With gold bullish momentum aiming for the $3,000 mark, silver could follow suit if market conditions are favorable. A break above $33.39 will bolster the uptrend and target potentially $35.40. However, traders should monitor for signs of gold reversal. For now, inflation concerns and geopolitical risks continue to support the positive outlook for the silver market.
