- La Plata falls more than 1% and consolidates between $ 36.00 and $ 37,00, oscillating near the 20 -day SMA.
- The Fed Proceedings reveal that those responsible for the policy are leaning towards just a rate cut this year.
- The RSI points to an upward impulse, but 37.00 $ remains a key level of rupture.
The price of silver registered losses of more than 1% on Wednesday after the US Federal Reserve (FED) revealed the minutes of its June meeting, insinuating that those responsible for the policy are considering only a cut of interest rates, instead of the two that investors had discounted. Although the dollar remained unchanged, the gray metal collapsed. At the time of writing, at the beginning of the Asian session, the XAG/USD quotes at 36.41 $, with an increase of 0.16%.
XAG/USD price forecast: technical perspective
From a technical perspective, consolidation is the key, with the XAG/USD oscillating between 36.00 and 37.00 $ during the last five days of negotiation, moving around the simple mobile average (SMA) of 20 days in 36.37 $.
The impulse is bullish, as indicated by the relative force index (RSI) in 57, which is prepared to move higher. Therefore, a greater increase in XAG/USD is expected.
For an upward continuation, the XAG/USD must exceed 37.00. A rupture of this last will expose the maximum of the year to date (YTD) of 37.31 $. Once exceeded, the next level of resistance would be 37.50 and $ 38.00.
On the other hand, if the price of silver falls below $ 36.00, the first support would be the 20 -day SMA in 36.37 $, followed by the figure of 36.00. Once exceeded, the following support would be the minimum of the June 30, $ 35.42 cycle, before the minimum of June 24, $ 35.29, and before the 50 -day SMA in $ 34.58.
XAG/USD – Diario price chart
SILVER – FREQUENT QUESTIONS
Silver is a highly negotiated precious metal among investors. Historically, it has been used as a value shelter and an exchange means. Although it is less popular than gold, operators can resort to silver to diversify their investment portfolio, for their intrinsic value or as a possible coverage during periods of high inflation. Investors can buy physical silver, in coins or bullion, or negotiate it through vehicles such as the funds quoted in the stock market, which follow their price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can cause the price of silver to shoot due to its safe refuge status, although to a lesser extent than that of gold. As an asset without performance, silver tends to climb with lower interest rates. Its movements also depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (XAG/USD). A strong dollar tends to maintain the price of silver at bay, while a weaker dollar probably drives rising prices. Other factors such as investment demand, mining – silver supply is much more abundant than gold – and recycling rates can also affect prices.
Silver is widely used in the industry, particularly in sectors such as electronics or solar energy, since it has one of the highest electrical conductivities of all metals, surpassing copper and gold. An increase in demand can increase prices, while a decrease tends to reduce them. The dynamics in US economies, China and India can also contribute to price fluctuations: for the US and particularly China, its large industrial sectors use silver in several processes; In India, the demand for consumers for precious metal for jewelry also plays a key role in pricing.
Silver prices tend to follow gold movements. When gold prices go up, silver typically follows the same path, since their status as shelter is similar. The gold/silver ratio, which shows the number of ounces of silver necessary to match the value of an ounce of gold, can help determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that silver is undervalued, or that gold is overvalued. On the contrary, a low ratio could suggest that gold is undervalued in relation to silver.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
