- The silver slides on Wednesday, although the mixed technical configuration justifies the caution for traders.
- Recent repeated failures to break the resistance of a descending channel favor bassists.
- The formation of a bullish flag pattern supports the prospects that some purchases arise at lower levels.
La Plata (XAG/USD) extends the backward drop in the previous day from the resistance zone of 33.20 -33.25 $ and attracts some continuation sales during the Asian session on Wednesday. White metal falls to a new daily minimum, around the $ 31.60 area in the last hour, although the mixed technical configuration justifies caution before positioning for deeper losses.
In the context of a good recovery from the area of ​​$ 28.45, or the minimum of the year reached in April, the recent price action along a three -week descending channel constitutes the formation of a bullish flag pattern. However, the failed attempt to break the resistance of the trend channel during the night makes a sustained movement beyond the 33.25 $ barrier before positioning for any significant increase in the middle of slightly negative oscillators in schedules/daily graphics.
The XAG/USD could then accelerate the positive movement towards the intermediate obstacle of $ 33.70 before aiming to recover the round 34.00 $. Some continuation purchases will lay the bases for a new short-term appreciation movement towards the monthly March of March, around the 34.55 $ -34.60 $ zone.
On the other hand, the weakness below the immediate support of $ 32.40 could make the XAG/USD vulnerable to fall below $ 32.00, or the weekly minimum reached Monday. This is followed by the area of ​​$ 31.70, or the monthly minimum, below which the white metal could try to challenge the support of the descending channel, currently located around the area of ​​31.35 $. A convincing rupture below the latter will be seen as a key trigger for bassists and will pave the way for deeper losses in the short term.
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.
