Commodities Analysis by Fawad Razaqzada covering: Gold Spot US Dollar, Silver Spot US Dollar, US Dollar Index Futures, Gold Futures. Read Fawad Razaqzada's latest article on Investing.com
Silver begins 2025 at a key technical juncture after a strong 2024 performance.Bullish momentum hinges on overcoming near-term resistance at $30.was trading higher to start the first full week of trading of the year, while gold was a touch lower on the session.
In the US, monetary policy is expected to stay tight in early 2025 as the Fed assesses the impact of Trump’s policies. This is likely to keep bond yields elevated and thestrong, both of which are potentially significant obstacles for gold and silver. Elevated bond yields increase the opportunity cost of holding gold and silver, non-yielding asset, while a strong dollar makes silver and gold more expensive for international buyers.
Price action since October is reminiscent of that of May – August 2024, when the metal went on a multi-month consolidation phase after surging to a new multi-year high. The consolidation ended around mid-August, leading to a fresh rally to new multi-year highs, before peaking in October. This time, it is not yet clear whether we have reached the end of the corrective phase, but if and when we do, I would expect a similar sharp rally to ensue, potentially targeting the $35 level.
Alternatively, if silver continues to dip lower without providing the above bullish scenario, then the next big technical area to watch for a possible reversal would be around $26.00 to 26.50, where the long-term trend line comes into focus. But ideally, I wouldn’t like silver to dip this deep, for that will erode the bullish momentum further and give further confidence to the bears.
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