- La Plata corrects down Tuesday against a stronger US dollar.
- The general trend remains positive, with limited bassists above 34.00.
- XAG/USD faces significant resistance before the level of $ 35.00.
Silver prices (XAG/USD) are quoting downward in Tuesday’s European session, affected by a somewhat firmer US dollar, since the state of risk aversion observed on Monday seems to have decreased.
The precious metal reached new six months on Monday, with the US dollar beaten by renewed concerns about disappointing US tariffs and economic data. The US manufacturing PMI confirmed the negative impact of tariffs on the manufacturing activity and pushed the US dollar to new minimums of several months.
Technical analysis: The general tendency of La Plata is still positive
From a broader perspective, the price action remains positive. Reversion from $ 34.75 has been contained at the round level of $ 34.00, above the previous resistance, now a possible support area, at $ 33.70.
Upwards, the area between 34.75 $ and $ 35.00 contains several levels of resistance (maximum of October 23 and June 4), and the Fibonacci extension of 161.8% of the recovery of May could be a hard bone to gnaw.
Above here, a peak at the end of 2012 is at $ 35.40. The fibonacci setback of 2611.8% is at $ 37.00.
On the negative side, the immediate support is in the aforementioned $ 33.70 and then in the 32.65 $ -32.75 $ area.
XAG/USD 4 -hour Graphic
FAQS SILVER
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.
