- Silver is having difficulty taking advantage of the strong gains it saw earlier in the week.
- Mixed signals in the technology setups need to be considered before making any new trades.
- A drop below $36.00 might represent a buying opportunity that is still being upheld.
During the Asian trading session on Thursday, silver (Xag/USD) appears to attract sellers around the $36.55-$36.60 range, which could undermine the significant upward movement it had earlier in the week. Currently, silver is trading about 0.50% lower, somewhere between $36.40 and $36.35. Traders are holding back, likely waiting for the US Non-Agricultural Payroll (NFP) report before committing to new positions.
Looking at the technical indicators, the MACD histograms and daily charts show a downward trend. However, the daily relative strength index (RSI, 14) sits above 50, suggesting that bears should tread carefully. Falling below $36.00 might trigger a limit near the support level between $35.50 and $35.40.
This support area is crucial—if there’s a break below it, it may lead to further technical selling and a descent toward the psychological $35.00 mark. Continued selling pressure could make XAG/USD more susceptible to declines, possibly driving it down to intermediate support around $34.75, eventually reaching further support near $34.45.
On the other hand, if silver manages to maintain strength and break through the $36.55-$36.60 resistance zone, it could be poised for attempts to reach the $37.00 mark. This momentum could even extend towards the range of $37.30 to $37.35, marking the highest levels since February 2012. Continued buying interest could set the stage for an upward trend that has persisted for nearly three months.
Silver Daily Chart
Silver FAQ
Silver is a highly traded metal among investors, serving historically as both a valuable reserve and a means of exchange. While it may not hold the same popularity as gold, it provides a way for traders to diversify their portfolios, either for its inherent value or as a hedge against inflation. Investors can purchase physical silver, such as coins and bars, or engage in trading through instruments like ETFs that mirror international market prices.
Numerous factors influence silver prices. Concerns over geopolitical tensions or severe economic downturns can make silver a safe haven, albeit to a lesser degree than gold. As a non-restricted asset, silver generally benefits from low interest rates. Its pricing is also tied to the US dollar (Xag/USD); a strong dollar can keep prices in check, while a weak dollar might lead to price increases. Other elements like investment demand and mining supply play roles as well; silver is more abundant than gold, and recycling rates can also impact its market.
Industries widely use silver, especially in electronics and solar energy, due to its excellent electrical conductivity—surpassing even copper and gold. Increases in demand often drive prices up, but downturns can have the opposite effect. Economic conditions in the US, China, and India significantly affect silver pricing, with industrial needs in these countries being key. Additionally, India’s demand for silver in jewelry also plays a critical role in price determination.
Silver prices generally follow trends set by gold. When gold rises, silver often moves in tandem, as both are viewed as safe investments. The gold/silver ratio reflects how many ounces of silver are needed to match the value of a single ounce of gold, serving as a gauge for their comparative value. Some investors might interpret extreme ratios as indicators that either silver is undervalued or gold is overvalued; conversely, a lower ratio may suggest that gold is cheaper relative to silver.
