Oct 09, 2023

Silver has continued to be hurt by a strong US dollar and the Fed’s rate outlook.

XAGUSD: Daily Chart

The price of silver bounced on Friday around $21 and looks to form a base there this week. $22.50 and $23.75 would be the first targets for silver this week on a further rally.

Silver and gold could rally this week due to rising geopolitical tensions in the Middle East. The escalating tensions between Israeli forces and Palestinian militants from Gaza led to the former declaring war, which will see an extended conflict.

Markets could fear that other nations will get involved or worsen their relationship with Israel. Hamas used an Israeli holiday to fight and kidnap its citizens, with a death toll of 600, and now there will be retaliation. American citizens were also said to be among the casualties.

“What happened today is unprecedented in Israel, and I will see to it that it does not happen again. The entire government is behind this decision. The IDF will immediately use all its strength to destroy Hamas’s capabilities. We will destroy them and forcefully avenge this dark day that they have forced on Israel and its citizens. All of the places in which Hamas is deployed, hiding, and operating in that wicked city, we will turn into rubble,” Israel’s leaders said.

Silver had been struggling to find investors after the latest strength in the US dollar and strong economic data hinting at no change in the Federal Reserve’s rate hike policy.

The United States economic calendar this week has FOMC minutes of the recent Fed meeting and also inflation figures. The market opening on Sunday could give hints of a geopolitical rally in gold and silver. The inability to rally on strong US job numbers hints that traders are looking beyond economic data.

Robust demand from the solar industry alongside limited supply growth from mines will boost silver prices once the period of higher global interest rates is over, analysts said. “Silver might see its biggest deficit in over a decade as mining production cannot keep up with demand. The solar industry has seen surging demand,” one analyst said.

Read More

Record Sales at ASML Fuels a Global Stock Rally
EURUSD Heads for Support Ahead of ECB Rate Decision
Tesla Stock Looks to Earnings for Reversal
Markets Anticipate Chinese Government Intervention After Slump
USDJPY Awaits the Latest Bank of Japan Interest Rate Decision
BoJ Focuses On Latest USD/JPY Rally