Introduction: Silver Saved Shines Amid Global Market Volatility
Being an industrial as well as precious metal, silver has a complex situation as we near 2024’s end. Fluctuations registered in the last several months in the XAG/USD pair unique an intersection of the geo-socio-political, factors; changes in demand in the industrial segments; anticipations regarding the new policies by the Federal Reserve. Silver embodies both precious metals and industrial metals making it an interesting case for risk-off hedge and value-adding instruments among investors in the market.
In this article, I focus on the recent data corresponding to the silver price, factors that affect the value of silver as well as levels to watch after moving into 2024.
Silver Prices in 2024: A Year-End Surge
Silver prices have shown that they can hold their own up as market volatility continues to stay high. The XAG/USD pair has been on the rise for the past several weeks and analysts have pointed that the silver price finds favorable support around $22.50 per ounce. One of the reasons propping up this rally is industrial end use, such as renewable energy and electronics as well as a weaker US dollar.
According to market gurus, the broader precious metals market has been benefited from policies set by the Federal Reserve. Expectations of a ‘Fed pivot that could delay rate increases until early 2024 has helped weaken the dollar and make commodities such as silver more attractive to overseas investors .
Global Cues and Their Impact
Global markets are also weighing heavily on the Nifty 50. Overnight gains in the U.S. markets provided a positive lead, while Asian markets presented mixed signals this morning. Concerns over oil prices, the U.S. Federal Reserve’s rate trajectory, and geopolitical developments are keeping investors cautious.
Domestically, the stabilization of crude oil prices is a silver lining for Indian markets. Lower energy costs provide relief to energy-dependent sectors and bolster the overall economic outlook.
Sectoral Insights: Winners and Losers
Several sectors are showing promising trends, while others face headwinds:
Technology: Despite global tech woes, Indian IT stocks have remained relatively resilient, thanks to favorable currency movements and steady demand from key international clients.
Banking and Financials: This sector continues to show strength, supported by improved credit growth and stable asset quality. Look for leading private banks to lead the rally.
Energy and Infrastructure: As noted by Local Haryana, infrastructure development initiatives and government policies are fueling optimism in energy and construction-related stocks.
On the flip side, FMCG stocks have seen some pressure due to rising input costs, which could compress margins in the short term.
Trading Strategy: Strategies for Doing Business in Today’s Economy
With the Nifty 50 at a crossroads, traders should adopt a balanced approach:
Short-Term Trades: Pay attention to the technical breaches of 19,300 as well as supports at 19,100 for the long trades. In cost management, it is advisable to keep stop-loss levels low in order to avoid a high level of risk.
Sectoral Rotation: Banking and energy needed in the market as those sectors are strong and infrastructure stocks should also be included.
Long-Term Perspective: To the investors, current levels could afford a good chance to buy quality stocks, at reasonable price.