- Silver price jumps to near $23, supported by PBoC’s dovish stance.
- The US economy is expected to grew by 2% in the fourth quarter of 2023.
- Silver price looks set to deliver a breakout of the Inverted H&S pattern.
Silver price climbs to near $23 after the People’s Bank of China (PBoC) announced a liquidity booster to uplift the economy that is struggling to recover post-pandemic. The PBoC is set to infuse liquidity of $140 billions into the banking system to support vulnerable economic growth.
S&P500 futures have generated some gains in the European session, portraying a risk-on mood. 10-year US Treasury yields have dropped to near 4.16%. The US Dollar Index (DXY) falls slightly to near 103.20 as investors shift focus towards the United States Q4 Gross Domestic Product (GDP) data, which will be published at 13:30 GMT.
As per the preliminary consensus, the US economy grew at a slower pace of 2.0% after expanding 4.9% in the third quarter of 2023. A slower growth rate would undermine the argument supporting a restrictive interest rate policy atleast until second quarter ends.
The hopes for an interest rate-cut by the Federal Reserve (Fed) has already eased significantly as the US economy is resilient on the grounds of labor market and consumer spending. • As per the CME Fedwatch tool, chances in favour of an interest rate cut by 25 basis-points (bps) have dropped to 42.4%.
Silver technical analysis
Silver price aims to deliver a breakout of the Inverted Head and Shoulder chart pattern, formed on a two-hour scale. The neckline of the aforementioned chart pattern is plotted from January 17 high at $22.88. The 50-period Exponential Moving Average (EMA) around $22.60 continues to provide support to the Silver price bulls.
The 14-period Relative Strength Index (RSI) has shifted into the bullish range of 60.00-80.00, which indicates that an upside momentum has been triggered.
Silver two-hour chart
(This story was corrected on January 25 at 12:42 GMT to say that US GDP data is expected to show the economy grew by 2% in the fourth quarter not the third quarter).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD posts modest gains above 0.6600, investors await fresh catalysts
The AUD/USD pair posts modest gains around 0.6605 during the early Asian session on Monday. Investors await the key US economic data this week for fresh catalysts, including the Consumer Price Index, Producer Price Index, and Retail Sales.
EUR/USD: Optimism surges ahead of the United States Consumer Price Index
An uneventful week ended with some more action, as choppy trading prevailed until Thursday. EUR/USD seesawed in a tight range just above the 1.0700 threshold for most of the week, with the US Dollar finally giving up and extending its slide while heading into the weekly close.
Gold extends the rally near $2,360 amid geopolitical risks
Gold price extends its upside near $2,360 on Monday during the early Asian trading hours. The rising geopolitical tensions in the Middle East boost safe-haven flows and benefit precious metals.
Could Worldcoin price shoot up 45% ahead of OpenAI’s live stream on Monday?
Worldcoin price has formed a double bottom around a key support level, suggesting a potential accumulation. If the OpenAI’s Monday live stream has a positive impact on Artificial Intelligence field, it could positively impact WLD and other AI-based tokens.
Week ahead: US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.