Shifting market sentiment had silver pacing back and forth inside a range that’s been holding so far this year.
The commodity is now closing in on the bottom and might be in for yet another bounce.
Do you think this support zone might hold?
Silver (XAG/USD) 4-hour Forex Chart by TradingView
Just like gold, this precious metal popped higher upon seeing a slightly weaker than expected U.S. core PCE price index.
While the headline reading came in line with estimates of a 0.4% monthly uptick for February, the previous figure was downgraded from the initially reported 0.2% gain to just 0.1%.
This adds to the streak of weaker-than-expected U.S. data all week, starting from downbeat durable goods orders figures to the downgraded preliminary GDP reading for Q4 2023.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on crude oil, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
With that, silver might be setting its sights back up on the upside targets, including the pivot point level ($23.000) and the range resistance near R1 ($23.418).
Sustained bullish momentum past this point might even take XAG/USD up to R2 ($23.887) or a rally that’s the same height as the rectangle pattern.
However, a return in selling vibes might drag the commodity price back down to the bottom of the range near S1 ($22.094), especially if risk-off flows resume.
The U.S. ISM manufacturing PMI is still up for release later today, and this might serve as another major catalyst for dollar price action and trigger swings in market sentiment.
Make sure you account for the average daily volatility of silver (XAG/USD) and keep close tabs on financial headlines when trading this one!