Silver price is currently surging towards a key resistance level as traders are taking the clues from recent economic catalysts. The high of $34.87 from October 22 is quite the mountain for Silver to climb. On the downside, the March 6 high of $32.77 now serves as critical support. We can see the Silver price is getting very close to the horizontal top border of the Ascending Triangle chart pattern. This formation is a testament to the market’s overall lack of direction on the daily time frame. Last month, US President Donald Trump announced a 25 percent tariff on auto imports. Yet this decision has added more confusion, roiling global financial markets and changing the economic math.
Ascending Triangle Pattern and Market Dynamics
The Silver market has been marked by the development of an Ascending Triangle chart pattern since August 8th. This formation is usually a sign that traders/investors are unwilling to commit to a direction. It’s indicative of a moment in time where supply and demand are nearly in perfect equilibrium. The upward-sloping top border of the pattern begins at retest of the August 8 low of $26.45. This is a big bullish sign as Silver approaches that October 22 high of $34.87.
The 20 day Exponential Moving Average (EMA) is being watched just as closely by the market participants, it currently lies at $33.20. This EMA has always defended the Silver price set 1934. As a result, it is one of the most important technical indicators used to gauge short-term price action and market trends.
Impact of US Tariffs on Global and Domestic Markets
Just last week, President Donald Trump announced the imposition of a 25% tariff on imports of autos. This announcement has caused major waves through global markets. These tariffs are scheduled to go into effect on April 2. In a press release, President Trump said that they would be collected beginning on April 3 and are intended to be permanent. The measure, widely seen as a retaliation for China’s export of value-added goods, would have far-reaching consequences not just for international commerce but the US economy.
It would hit hard on the major auto-exporting nations, including Mexico, Canada, Japan, South Korea and Germany. Below are the countries the USDOT and Commerce Department have pointed to as the top five risky exporters to the United States in 2022. International automakers are now under the gun to establish new manufacturing operations in the United States. Higher available labor costs would mean higher car prices in turn. This situation will, of course, erode consumer purchasing power.
Inflation Projections and Economic Outlook
Beyond tariff-related fears, America’s economic stakeholders are understandably nervous and tuned-in to inflation metrics. The Fed’s favored measure, the core Personal Consumption Expenditures (PCE) inflation index, is primed to register a 2.7% surge on a year-on-year basis. This represents an increase from the 2.6% increase in January. This increase in inflation will likely affect central bank policy action and impact the investor mood in the months ahead.
With all these economic factors aligning, the Silver market’s response will be telling. Traders and analysts have to keep their wits about them to thrive in this multifaceted environment. Together, this interplay amongst technical chart patterns, tariff progress and inflationary headwinds will probably determine future price movement.