- Silver kicks off the new week on a weaker note, albeit manages to hold above the $33.00 mark.
- The technical setup warrants caution for bears and before positioning for any further losses.
- A sustained break below the $33.00 mark should pave the way for some meaningful correction.
Silver (XAG/USD) attracts fresh sellers during the Asian session on Monday and currently trades around the $33.30 area, down nearly 1.25% for the day. The white metal, however, manages to hold above a one-week low, around the $33.10-$33.00 area, set on Friday, warranting some caution for bearish traders.
Moreover, technical indicators on the daily chart – though have been losing positive traction – are holding in positive territory. This further makes it prudent to wait for a convincing break below the $33.00 mark before positioning for an extension of last week's pullback from the highest level since October 2012. Some follow-through selling below the $32.75-$32.65 resistance-turned-support will reaffirm the negative bias and make the XAG/USD vulnerable.
The subsequent downfall might expose the $32.20-$32.15 intermediate support before the white metal drops to the $32.00 round figure and the $31.70-$31.65 region. The downward trajectory could extend further and drag the XAG/USD towards the $31.00 mark en route to the $30.50 area and the monthly swing low, close to the $30.00 psychological mark tested on October 8.
On the flip side, the $33.65 horizontal zone now seems to have emerged as an immediate hurdle, above which the XAG/USD is likely to reclaim the $34.00 mark and climb further towards the $34.30-$34.35 supply zone. The momentum could extend further and allow bulls to make a fresh attempt to conquer the $35.00 psychological mark before aiming to challenge the October 2012 swing high, around the $35.35-$35.40 region.
Silver 4-hour chart
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends gains above 1.0800 amid risk appetite
EUR/USD has regained traction above 1.0800 in European trading on Monday. The pair is finding fresh demand amid a modest pullback in the US Dollar and persisting risk flows. However, elevated US Treasury yields and dovish ECB bets cap the pair's upswing.
GBP/USD recovers above 1.2950 as USD loses ground on better mood
GBP/USD is recovering above 1.2950 in the European session on Monday. A pick up in risk sentiment and a minor US Dollar retreat is helping the pair stage a bounce but traders remain wary amid looming Middle East geopolitical risks and the BoE easing expectations.
Gold price remains on the defensive below $2,748-2,750 hurdle amid positive risk tone
Gold price struggles to capitalize on its intraday bounce and remains below the $2,748-2,750 supply zone through the early part of the European session on Monday. Safe-haven demand stemming from Middle East tensions and US election jitters continues to act as a tailwind for the precious metal.
Metaplanet stock jumps after announcing $10.5 million Bitcoin purchase
Japanese investment firm Metaplanet Inc. said on Monday that it had expanded its Bitcoin holdings by around 156 BTC, worth around $10.5 million. With the latest purchase, the Tokyo-listed firm has more than doubled its Bitcoin holdings in Q3, holding 1,018 BTC valued at around $69 million.
US elections: The race to the White House tightens
Trump closes in on Harris’s lead in the polls. Neck and neck race spurs market jitters. Outcome still hinges on battleground states.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.