Silver Price Analysis: XAG/USD directs three-day uptrend towards $28.00 amid downbeat USD
|- Silver prints mild gains inside a small range.
- Market sentiment dwindles amid indecision over Fed’s next moves, inflation fears.
- US dollar extends Friday’s NFP-led weakness amid mixed concerns.
- Covid, China become extra catalysts to follow for fresh impulse.
Silver prices trade sidelined around $28.90, up 0.07% intraday, amid Tuesday’s Asian session. The white metal is consolidating the previous week’s losses during the three-day uptrend by the press time.
The US dollar weakness and hopes of economic recovery could be cited as the key reasons behind silver’s latest uptrend. The commodity prices gained traction to the north after the US Nonfarm Payrolls data, published Friday, helped the Fed to defend its easy-money policies.
In addition to the inverse correlation with the US dollar (USD), hopes of the economic recovery, backed by faster vaccinations, also help silver as it has a notable industrial usage. Also, chatters that the prices of the bullion are comparatively less high than the gold put a bid under the quote.
On the contrary, doubts over the unlock in the UK, Japan and India join the Western tussles with China, recently relating to covid origin and trade ties with Australia, probe silver buyers. Furthermore, a lack of major data/events and cautious mood ahead of the next Thursday’s US Consumer Price Index (CPI) and the ECB monetary policy meeting also weigh on the market sentiment and test the metal bulls.
It’s worth noting that the sluggish moves of the US Treasury yields and downbeat stock futures confuse the USD traders and help silver indirectly.
Moving on, sluggish sessions are likely to keep the metal prices under check ahead of Friday. However, news over the Fed’s next move and inflation, not to forget covid and China, could entertain market players meanwhile.
Technical analysis
A clear upside break of the one-week-old falling trend line favors silver buyers to aim for a $28.25-30 area’s revisit.
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