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Silver Develops Flat Dynamics

1/12/2023 11:04 AM

After a three-day decline, as a result of which the XAG/USD pair renewed local lows from January 6, today, during the Asian session, the quotes are growing, testing 23.60 for a breakout.

On Thursday, the US will publish December data on consumer inflation, which may slow down from 7.1% to 6.5% YoY, and show zero dynamics after rising by 0.1% earlier. Excluding food and energy, the figure is expected to fall from 6% to 5.7%, but it could rise from 0.2% to 0.3% MoM. Investors hope that new evidence of inflationary pressures stabilizing will have a softening effect on the US Fed's monetary policy, with more than 77% of analysts now forecasting only a 25.0 bps increase in February after a 50.0 bps growth at the end of last year. Expectations of further tightening monetary policy by the European Central Bank (ECB), the Bank of England, and the Bank of Japan, which has not yet announced its intentions, have a moderate negative impact on the asset.

According to the latest report from the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions in silver last week amounted to 30.9K against 31.0K a week earlier: the "bears" strengthened their leadership, and the gap in positions among swap dealers increased, reaching 46.009K transactions against 37.161K of the "bulls." This week, sellers have increased the number of contracts by 1.410K, while buyers have increased them by only 0.157, indicating continued investor interest.

On the daily chart, Bollinger bands decline: the price range changes slightly, indicating a rough balance of power in the short/ultra-short term. The MACD indicator falls, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic, having made an unsuccessful attempt to grow at the beginning of the week, consolidates around 20, waiting for the situation to develop.

Resistance levels: 23.60, 24.00, 24.42, 24.67. | Support levels: 23.32, 23.00, 22.70, 22.40.

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