- La Plata enters a bullish consolidation phase during the Asian session on Wednesday.
- A slightly overcompared daily RSI brakes the XAG/USD bulls to make new bets.
- Any corrective setback could be seen as a purchase and remain limited opportunity.
La Plata (XAG/USD) is consolidating the strong profits of the previous day to its highest level from February 2012 and oscillating in a narrow range during the Asian session on Wednesday. The white metal currently lies just above the round figure of 37.00 and seems to be prepared to prolong the recent bullish trend well established since the monthly minimum of April.
From a technical perspective, the night break through a short -term descending trend channel, which constituted the formation of a bullish flag pattern, and the subsequent upward movement validate the constructive perspective. However, a relative force index (RSI) slightly overcompiled in the daily chart justifies a certain caution. Therefore, it will be prudent to expect some short -term consolidation or a modest setback before making new bullish bets around the XAG/USD and position yourself for more profits.
That said, any corrective sliding is more likely to attract new buyers and remain limited near the resistance point of the ascending channel, around the 36.90 $ -36.85 $ region. However, a convincing rupture below could cause some technical sales and drag the XAG/USD more towards the horizontal support of 36.40 $ -36.35 on route to levels below $ 36.00, or the weekly minimum. The latter should act as a key point, which if it breaks could pave the way for a significant short -term fall.
However, the XAG/USD seems to be prepared to climb even more towards the maximum oscillation test of February 2012, around 37.00. Some follow -up purchases should allow XAG/USD to aim to recover the round figure of 38.00. The impulse could extend even more towards the next relevant obstacle near the region of 38.50 $ -38.55 $.
4 -hour silver chart
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.
