While gold prices are down though not out, the silver market has recently seen a sign of aggressive profit-taking. After a fierce rally, silver prices bounced back below $25 per ounce. Experts say that is not the end. The metal price has some more room to fall even lower.
What we see now is the highly overvalued silver market. Analysts agree on the fair price of around $23.86 an ounce. The recent rally with the 5.7% rise was not typical for the market. The price seemed to be overvalued.
Investors are starting to see interesting signals that are not typical for the asset. Actually, the silver rally overshot its fundamentals, which happens quite seldom. What’s more, major commodities featuring gold, iron ore, copper, and silver are significantly affected by the weakening USD. Despite the fact, the yellow metal and silver both hit their multi-week highs, the U.S. Dollar saw its lowest hitting point since April 2022 after dropping below 100 points.
The market reaction can be even more serious considering the fact the FED is planning its last-time interest rate hike within the aggressive tightening policy taking place for the first time in the last 40 years. In simpler words, if we see the peak rate hike by FED, the commodities market will benefit from the situation featuring a weaker greenback.
Meanwhile, silver is hoping to get stronger growth. For some traders, the asset may turn out to be easy money via low-rate volume before the USD starts moving in the friendly direction. Experts recommend watching out for unexpected turbulence, as the possibility of the economy skipping into recession is still pretty high.
May the trading luck be with you!