. Silver Rises 0.19% on Global Banking Concerns - 28 April 2023

Silver Rises 0.19% on Global Banking Concerns – 28 April 2023

Silver Rises 0.19% on Global Banking Concerns – 28 April 2023

28 Apr 2023

Silver Soars as Global Banking Concerns Dampen Risk Sentiment.

Silver experienced a modest increase of 0.19% in yesterday’s trading, closing at 73959, primarily driven by risk sentiment concerns surrounding the global banking sector. Investors recognized that despite lower-than-expected GDP data for Q1, the Federal Reserve is still expected to raise interest rates in the upcoming week. While business and residential investment slowed down, consumer spending remained resilient, and the personal consumption expenditures price index indicated higher inflation than estimated. Furthermore, the demand for silver was also boosted by a report highlighting the record-breaking contribution of wind and solar energy to electricity generation in 2022.



Global Banking Sector Concerns Weigh on Risk Sentiment:

The global banking sector faced apprehension as Republic Bank’s rescue plan hinted at a significant divestment, leading to dampened risk sentiment among investors. A Bloomberg report unveiled the bank’s intentions, triggering concerns about the health of the banking industry. This development prompted investors to seek safe-haven assets, including precious metals like silver. The uncertainty surrounding the banking sector contributed to the positive performance of silver in yesterday’s trading session.

Anticipation of Fed Rate Hike Despite Slower Q1 Growth:

Despite the slower-than-expected growth of the US economy in the first quarter, investors adjusted their expectations and accepted that it would not deter the Federal Reserve from raising interest rates. The slowdown in business investment, decline in residential investment, and negative contribution from private inventory affected the overall GDP figures. However, consumer spending remained robust, demonstrating a 3.7% increase. Additionally, the personal consumption expenditures price index, which serves as a key inflation indicator for the Federal Reserve, surpassed estimates by reaching 4.2%. This higher inflation reading supports the case for the Federal Reserve to consider raising rates.

Demand for Silver Bolstered by Renewable Energy Growth:

Silver’s industrial demand received a boost from a report by Ember, revealing that wind and solar energy accounted for a record-breaking 12% of global electricity generation in 2022. The increasing adoption of renewable energy sources underscores the growing need for silver as a crucial input in various industries, including solar panels and electronics manufacturing. This strong demand from the renewable energy sector further contributed to the positive market sentiment surrounding silver.

Technical Analysis and Market Outlook:

From a technical perspective, the silver market exhibited short covering as open interest witnessed a significant drop of 17.23%, settling at 4957. Meanwhile, prices increased by 140 rupees. The market’s support level is identified at 73169, and a breach below this level could lead to a potential test of 72378. On the other hand, resistance is expected to be encountered at 74645, and a move above this level could prompt prices to test 75330. These technical factors provide additional insight into the market dynamics and potential price movements for silver.

Conclusion:

Silver’s performance in yesterday’s trading session was influenced by several factors, including concerns over the global banking sector, the anticipation of a Federal Reserve interest rate hike, and strong demand driven by the renewable energy industry. Despite slower Q1 economic growth, consumer spending remained resilient, and inflation surpassed estimates. This combination of factors contributed to the positive sentiment surrounding silver, attracting investors seeking safe-haven assets.

Furthermore, the report on wind and solar energy’s significant contribution to electricity generation highlighted the growing need for silver as an industrial input. This demand from the renewable energy sector further bolstered silver’s market outlook.

Looking ahead, market participants will closely monitor the developments in the global banking sector and the Federal Reserve’s decision on interest rates. Additionally, factors such as economic data