- The price of silver rises even more to about 36.20, with the aim of balanceing the valuation compared to gold.
- The improvement of commercial relations between China and the US fails to limit the rise in La Plata.
- Investors expect US employment data for May in search of new clues about the Fed monetary policy perspective.
The price of silver (XAG/USD) reaches a new maximum in more than a decade, about 36.20 $ on Friday. White metal works strongly, since market experts cite it as a value purchase, citing its secular undersauguration compared to gold.
Silver has had a lower performance than gold for a long period of time and seems to be significantly undervalued. This seems to be attracting investors, said Commerzbank analysts. They added that the silver market is expected to be in a “supply deficit for the fifth consecutive year.” However, the deficit is expected to be “significantly lower” since “the demand will probably decrease and the supply will increase.”
In the global economic front, commercial concerns between the United States (USA) and China have decreased after a publication of President Donald Trump in Truth. Social that indicated that he had a direct conversation with Chinese leader Xi Jinping and that commercial conversations between them will be fluid in the future.
“The call lasted about an hour and a half, and resulted in a very positive conclusion for both countries.” Trump wrote.
Theoretically, the resolution of global economic tensions decreases the demand for shelter assets, such as silver. However, the demand for silver as an industrial input will increase, given its application in several sectors, such as mining, electric vehicles and semiconductors, etc.
In Friday’s session, investors will focus on the US non -agricultural payroll data (NFP) for May, which will be published at 12:30 GMT. Labor market data will influence market expectations on the monetary policy perspective of the Federal Reserve (FED).
The highest interest rates by the Fed for a longer period are unfavorable for assets that do not generate performance, such as silver.
Before the US NFP data, the US dollar index (DXY), which tracks the value of the dollar against six main currencies, gains ground and rises to about 99.00.
Technical Analysis of La Plata
The price of silver advances around 36.20 after breaking above the key resistance drawn from the maximum of October 22, $ 34,87, which will now act as a key support. The 20 -day exponential (EMA) mobile average in progress about $ 33,85 suggests that the short -term trend is upward.
The 14 -day relative force index (RSI) jumps above 70.00, indicating a strong bullish impulse.
Looking up, the psychological level of $ 40.00 will be the main resistance for the price of silver. Downwards, the maximum of October 22, 34,87 $ will act as a key support for the asset.
GRAPH DIARY OF LA PLATA
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.
