Friday could be an important day for silver: double top or new record highs?

[Forex News]

KEY POINTS:

• Silver remains supported amid geopolitical tensions, weak US data and dovish Fed expectations
• Risks in the short-term include the US NFP report on Friday and potential US Supreme Court decision on tariffs
• Big picture uptrend should remain intact amid the Fed's dovish reaction function
• Price chart shows a possible double top in the making

FUNDAMENTALOVERVIEW

Silver has been the hottestasset of 2025. The fundamentals are the same as for gold, but silver is more volatile. The precious metal continues to be supported by the geopoliticaltensions, the weak US data and the dovish Fed expectations. The bullish momentum remains intact, but we havetwo important events on Friday that could challenge that.

In fact, on Friday we getthe latest US NFP report and while the previous report might have been takenwith a pinch of salt due to shutdown related issues, this one should give us aclearer picture. Strong data might lead to a bigger pullback as traders pushback on expectations of an imminent Fed rate cut, while soft figures shouldkeep on supporting the upside.

Moreover, yesterday the USSupreme Court scheduled Friday as an opinion day, which could see a decision onTrump’s tariffs. In case the tariffs are struck down, silver will likely fallamid easing stagflation risks. On the other hand, if tariffs are kept in place,it shouldn’t change much although it would keep the upside intact.

In the bigger picture, silvershould remain in an uptrend as real yields will likely continue to fall amidthe Fed’s dovish reaction function. But in the short term, a hawkish repricingin interest rate expectations could weigh on the market.

SILVER TECHNICALANALYSIS – DAILY TIMEFRAME

On the daily chart, we cansee that silver recovered all the losses from last week’s selloff and touchedthe all-time highs. Is this going to be a double top or will we see new recordhighs ahead? The sellers will likely step in around these levels with a definedrisk above the all-time high to position for a drop into the 69.00 handle. Thebuyers, on the other hand, will want to see the price breaking higher toincrease the bullish bets into new all-time highs.

SILVER TECHNICAL ANALYSIS –4 HOUR TIMEFRAME

On the 4 hour chart, we cansee that we have an upward trendline defining the bullish momentum. If we get apullback into the trendline, we can expect the buyers to lean on it with adefined risk below it to position for a rally into a new all-time high. Thesellers, on the other hand, will look for a break lower to increase the bearishbets into the 69.00 handle.

SILVER TECHNICAL ANALYSIS –1 HOUR TIMEFRAME

On the 1 hour chart, we cansee that the price broke below the upward trendline that was defining thebullish momentum on this timeframe. This could be a signal of a loss ofmomentum and a bigger pullback in the cards. The sellers piled in on the breaktargeting a drop into the major trendline. The buyers have a mixed picture hereand will need to wait for a pullback into the major trendline or a break abovethe all-time high.

UPCOMING CATALYSTS

Today we have the US ADP, the US ISM Services PMI and the US Job Openingsdata. Tomorrow, we get the latest US Jobless Claims figures. On Friday, weconclude the week with the US NFP report and potential US Supreme Courtdecision on Trump’s tariffs.

This article was written by Giuseppe Dellamotta at investinglive.com.

More...