Silver Weekly Special Report based on 1.00 Lot Calculation:
CENTRAL BANKS: INTEREST RATE CUT DECISION
- BREAKING (SEPTEMBER 18): FEDERAL RESERVE ANNOUNCED ITS FIRST INTEREST RATE CUT SINCE 2020. US Federal Reserve decided to cut its benchmark interest rate by 0.50% points on September 18, to 5.00% from the previous 5.50%. The bank expects to cut rates two more times in 2024 to slash its benchmark rate to 4.5% by the end of 2024. The bank expects rates to fall to 3.5% in 2025 and further down to 2.9% in 2026. NEXT FED INTEREST RATE DECISION: November 7, 2024. As of September 23, the market sees equal chances for 50 basis points or 25 basis points interest rate cut. This could bring current rates of 5.00% down to either 4.75% or 4.50%.
EVENTS:
- THURSDAY, SEPTEMBER 26 AT 13:30 GMT+1: US WEEKLY INITIAL JOBLESS CLAIMS. Initial jobless claims came in lower than expected last week (219K vs. 230K exp.). If the number, however, comes in higher than expected on Thursday, then Silver could be expected to rise in value. However, it could also decline.
- THURSDAY, SEPTEMBER 26 AT 13:30 GMT+1: US GROSS DOMESTIC PRODUCT (GDP) (Q2). The final reading is expected to show a growth rate of 3% for the second quarter, confirming what we got with the second reading a month ago. If a lower rate than expected is printed, then Silver could be expected to rise in value. However, it could also decline.
- FRIDAY, SEPTEMBER 27 AT 13:30 GMT+1: US PCE PRICE INDEX (AUGUST). Personal Consumption Expenditure (PCE) price index is a relevant inflation indicator that is preferred by the US Federal Reserve. For July, data showed a decline to 2.5% from the previous 2.6%. If data continues showing a declining trend for August, then Silver could be expected to rise in value. However, it could also decline.
OTHER ANALYSIS:
- SILVER DEMAND: The United States remains the most important market with 22% of global demand for silver, while China represents 15% of global demand for silver (Source: Bloomberg). China's economy could potentially grow by about 5%. Silver's recent upward momentum is underpinned by soaring global demand, particularly from the solar industry, which relies heavily on the metal for photovoltaic cells. India's silver imports have nearly tripled in 2024, contributing significantly to this demand. Additionally, rising geopolitical tensions are bolstering silver’s appeal as a safe-haven instrument.
- CHINA UNVEILED A SLATE OF EASING MEASURES TO SUPPORT THE ECONOMY: Top consumer China unveiled a slate of easing measures to support the economy. People’s Bank of China Governor Pan Gongsheng said in a rare briefing that the PBOC will cut the reserve requirement ratio by 50 basis points before the year ends, alongside cuts to key lending rates, though no precise timing was given.
ANALYST EXPECTATIONS
- UBS: The bank targets a price of $36.
- CITIGROUP: The bank targets a price of $40.
- JP Morgan: The bank targets a price of $34.
PRICE ACTION
- ALL-TIME HIGH PRICE: $49.80. Silver jumped to $49.80 in 2011, during the debt crisis in Europe. Currently, Silver trades around $30.60 and if full recovery is made this could offer an upside potential of around 63%. However, it could also decline.
Silver, September 25, 2024
Current Price: 31.60
|
SILVER |
Weekly |
|
Trend direction |
|
|
40.00 |
|
|
36.00 |
|
|
33.00 |
|
|
30.60 |
|
|
30.30 |
|
|
30.00 |
Example of calculation based on trend direction for 1.00 Lot*
|
SILVER |
||||||
|
Pivot Points |
||||||
|
Profit or loss in $ |
84,000.00 |
44,000.00 |
14,000.00 |
-10,000.00 |
-13,000.00 |
-16,000.00 |
|
Profit or loss in €2 |
75,078.77 |
39,326.97 |
12,513.13 |
-8,993.41 |
-11,691.44 |
-14,389.46 |
|
Profit or loss in £2 |
62,765.26 |
32,877.04 |
10,460.88 |
-7,511.40 |
-9,764.82 |
-12,018.24 |
|
Profit or loss in C$2 |
112,840.98 |
59,107.18 |
18,806.83 |
-13,548.35 |
-17,612.86 |
-21,677.36 |
1. 1.00 lot is equivalent of 10.000 units
2. Calculations for exchange rate used as of 09:55 (GMT+1) 25/09/2024
There is a possibility to use Stop-Loss and Take-Profit.
- You may wish to consider closing your position in profit, even if it is lower than suggested one.
- Trailing stop technique could protect the profit.