Market news
02.07.2024, 04:05

Silver Price Analysis: XAG/USD remains depressed near $29.30-35 area, lacks follow-through

  • Silver drifts lower during the Asian session on Tuesday and snaps a three-day winning streak.
  • The mixed technical setup warrants some caution before placing aggressive directional bets.
  • A sustained strength beyond the $30.00 mark is needed to negate any near-term negative bias.

Silver (XAG/USD) struggles to capitalize on its modest gains registered over the past three days and attracts some sellers during the Asian session on Tuesday. The white metal currently trades around the $29.35-$29.30 area, down 0.45% for the day, and for now, seems to have stalled the recent recovery from its lowest level since mid-May touched last Wednesday.

From a technical perspective, last week's breakdown through the 50-day Simple Moving Average (SMA) was seen as a fresh trigger for bearish traders. That said, the subsequent bounce from the 61.8% Fibonacci retracement level of the $26.02-$32.51 rally and neutral oscillators on the daily chart warrant some caution before positioning for further losses. 

In the meantime, the $29.55-$29.60 area is likely to act as an immediate hurdle ahead of the 38.2% Fibo. level, around the $30.00 psychological mark. A sustained strength beyond the latter will negate any near-term negative bias and lift the XAG/USD to the $31.00 neighborhood with some intermediate resistance near the $30.30-$30.35 supply zone. 

On the flip side, the $29.00 round figure is likely to protect the immediate downside ahead of the $28.60-$28.55 region, or the 61.8% Fibo. level. A convincing break below has the potential to drag the XAG/USD towards the $28.00 mark. The downfall could extend further towards the $27.40-$27.30 confluence – comprising 78.6% Fibo. and the 100-day SMA.

Silver daily chart

fxsoriginal

Silver FAQs

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

 

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location