FxWirePro- Silver Trade Idea

Silver trades weak on easing industrial demand. It hit a low of $30.10 and is currently trading around $30.41.

In January 2025, China's Purchasing Managers' Index (PMI) has worrying signals for its economy. Manufacturing PMI stands at 49.1, meaning the sector is contracting because it is below 50. Non-manufacturing PMI is at 50.2, showing slower growth in the service sector compared to last month. The Composite PMI is at 50.1, reflecting very weak overall growth across both manufacturing and services. While some government efforts to boost the economy might help, recovery remains uncertain and fragile.

The Federal Reserve is now preparing for its meeting on January 28-29, 2025. At present, the interest rates range from 4.25% to 4.5%, having been lowered by a cumulative 100 basis points in late 2024. The Fed would cut rates by only two this year, to a total of 50 basis points, versus earlier expectations of four cuts. Inflation is proving to be stronger than expected, making policymakers cautious about further reducing rates, despite a strong job market. Financial markets predict that the Fed will not cut rates during the upcoming meeting as they try to balance managing inflation risks with the need to support economic growth.

Trading Strategy and Key Levels for Silver

The commodity is trading below short-term (34 and 55 EMA) and long-term moving average (200- EMA) in the 4-hour chart. The near-term support is around $30 and any violation below will drag the commodity to $29.60/$29/$28.40. The immediate resistance is at $31.25 any breach above targets $31.75/$32/$32.25/$33/$35.

It is good to buy on dips in the $29.48-50 range, setting a stop-loss at $28.70 and targeting a price of $32.25/$33.