SIVR and SLV ETF stocks outlook as US inflation slips
The iShares Silver Trust (SLV) and the abrdn Physical Silver Shares (SIVR) ETFs continued surging as signs of a Fed pivot increased. SLV and SIVR ETFs, which tracks the price of physical silver, rose to the highest level since April 2022. They have jumped by ~44% from the lowest point in 2022.
Silver price rally continuesCopy link to section
The iShares Silver Trust and the abrdn Physical Silver Shares ETFs are leading exchange-traded funds with $11 billion and $1.1 billion in assets. They offer a good way for investors to invest in silver without having an access to the physical metal.
Therefore, SLV and SIVR ETFs tend to track the price of silver. And silver has done well this year as it jumped to a high of $25.5. It has risen by more than 28% from the lowest level in March. This performance is also in line with that of gold, which is hovering near an all-time high.
The main catalyst for silver prices is the rising hopes that the Federal Reserve will start pivoting soon. Data published on Wednesday showed that the country’s infflation continued dropping in March. The headline consumer price index (CPI) dropped to 5.0% in March, the lowest level since 2021.
These numbers mean that the Fed’s actions to fight inflation are working. Meanwhile, minutes of the Federal Reserve showed that some members considered pausing interest rates in March. The minutes also revealed that officials were concerned about a recession later this year. They said:
“Policymakers scaled back expectations for interest-rate hikes this year after banking turmoil; officials stressed need to watch incoming data to see how deeply an anticipated credit crunch would slow economy.”
Therefore, there is a likelihood that the Fed will either stop hiking interest rates after rising by 25 basis points in May. Some analysts believe that the bank will cut rates later this year or in 2024. This explains why the DXY index and bond yields have plunged. The US dollar index has dropped to $101.44.
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SLV and SIVR ETFs forecastCopy link to section
SLV and SIVR ETFs have a close correlation with each other. On the daily chart, we see that the SLV ETF stock price has been in a strong bullish trend in the past few months. It managed to move above the key resistance level at $22.54 on April 4. By moving above this level, the ETF invalidated the double-top pattern.
SLV stock has jumped above the 25-day and 50-day exponential moving averages. It has also risen above the 78.6% Fibonacci Retracement level. Therefore, the outlook of the fund is higher, with the next level to watch being at $24.88, the highest point on March 8, 2022. If this happens, the SIVR ETF will also rise to $6.