- Silver prices have been capped around the $ 25.00 level in today’s session.
- Given the American market holiday in the middle of the Martin Luther King holiday, volumes are slim.
- The mild USD strength has done little to affect sentiment towards precious metals.
The spot prices of the silver (XAG / USD) have been capped just below the $ 25.00 level during Monday’s session, with price action mostly hovering near the 50-day moving average at $ 24.90. Volatility has declined significantly after what was a very hectic start to the European session on Monday. Shortly after the business reopened, silver spot prices fell sharply to lows just above $ 24.00, before retreating sharply towards the $ 25.00 level, where prices have consolidated. At the time of writing, the white metal is holding up around 0.97% on the day, up around 24 cents.
Given the closing of the US market amid the Martin Luther King Day holiday, volumes are already in short supply and will decline with the departure of European market participants starting at 16:30 GMT, only to rebound around from the start of the Asian session on Tuesday. Silver Spot Prices Higher Despite Much Stronger USD.
US dollar DXY index rises towards 91.00
The USD has rebounded and is extending the slightly higher rally on Monday. There appear to be no specific fundamental drivers behind the move. Maybe there is still some caution regarding the worsening of the global Covid-19 pandemic. The WHO spoke on Monday about how they expect global daily deaths to exceed 100,000 in the coming days. Meanwhile, China reported more than 100 coronavirus cases for the sixth day in a row, contributing to fears that cases will experience a significant acceleration as millions of Chinese travel to spend the Lunar New Year holidays with their families. Currently, 29 million people live confined in the country.
Stronger-than-expected Chinese GDP figures for the fourth quarter (in which the economy grew at a year-on-year rate of 6.5% versus expectations of an annualized growth rate of 6.1%) did not significantly influence the US dollar through a lower USD / CNH. In fact, USD / CNH is trading about 0.2% higher, but it is still below 6.5000.
Perhaps also contributing to the somewhat negative tone of the market is the news that the president-elect of the United States, Joe Biden, might have to cut spending plans and increases in the minimum wage given a divided government and possible opposition from moderate Democrats (Democratic Wall Street sources have said, cited by Fox Business news reporter Charles Gasparino).
Either way, the mild USD strength has done nothing to affect sentiment towards the precious metal. The most compelling price action will likely have to wait until Tuesday, when US investors return after the long weekend.
Silver technical levels
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