Will Trump's win in US election 2024 hurt Silver? Check strategy for today

Silver rate today: Silver is likely to do better than gold in the short-term in case Harris wins the presidential race

Silver: Traders gear up for huge volatility as US election result awaited

Silver Performance:

 

Spot silver was changing hands at $32.65, up nearly 0.50 per cent on the day, at the time of writing this report as the metal continues to trade between $32 and $33.

 

The MCX December silver contract was trading at Rs 94,682, up 0.42 per cent.

 

US Dollar and yields:

 

The US Dollar Index was noted at 103.57, down nearly 0.30 per cent on the day. However, the US yields, reacting to the US ISM services report, spiked. The ten-year US yields at 4.358 per cent were up nearly 1.70 per cent on the day, while the two-year yields, at 4.23 per cent, were up around 1.50 per cent.

 

Data roundup:

 

The US ISM services Index came in at 56 (prior 54.90) as against the forecast of 53.80 as ISM services employment surged into expansion zone. ISM prices paid at 58.10 beat the estimate of 58.

Upcoming data and event:

 

The major US data to be released today include unit labour costs, and weekly jobless claims.

 

FOMC will deliver its monetary policy decision on November 7. The Fed is expected to slash interest rates by 25 bps to 4.50-4.75 per cent range. The Bank of England will also decide on its monetary policy on November 7. The Bank is expected to cut the benchmark rate by 25 bps to 4.75 per cnt.

Silver ETF:

 

Total known global silver ETF holdings stood at 742.761 Moz as on November 4, lower than 744.01 Moz on November 1.

 

Silver Price Outlook:

 

Silver may get support from uncertainty over the US election results. A quick and a decisive result may weigh on the metal though as traders are likely to book profit in that case.

 

Trump coming to power is likely to heighten Sino-US trade tensions, which would be positive for the gold, so silver may benefit on gold moves. However, if Trump wins, the US yields and the Dollar Index are likely to surge, which can initially pressurise the precious metal. 

 

Nonetheless, overall, as traders focus on the ballooning US fiscal deficit, rising US debt/GDP ratio, geopolitics and inflationary factors, Trump's victory will be eventually positive for silver.

 

On the other hand, silver is likely to do better than gold in the short-term in case Harris wins the presidential race as her economic policies are likely to be somewhat less inflationary and may lead to a sustainable and equitable growth with relatively a smaller borrowing.

 

Huge volatility is expected in the wake of the election results.

 

Support for the metal is at $32 (Rs 92,800)/$30 (Rs 87,000). Resistance is at $33.25 (Rs 96,400) /$35 (Rs 101,000).  =================  Disclaimer: Praveen Singh – Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas. Views expressed are his own