- La Plata bounces from minimum of 36.30 $ favored by the recoil of the US dollar.
- The Fed Dovish minutes and lower yields in the US are weighing on the US dollar on Thursday.
- XAG/USD needs to exceed 36.80 and $ 37.25 to confirm the bullish bias.
La Plata (XAG/USD) was appreciated on Thursday, with precious metals receiving support from a somewhat weaker US dollar, since treasure yields fell after the MANS OF THE FOMC with a Dovish bias and a strong auction of American bonds on Wednesday.
The minutes of the last meeting of the Federal Reserve confirmed a deep divergence within the committee, with most members preventing at least one rate cut before the end of the year.
This, together with a successful auction of 39,000 million dollars in 10 -year Treasury letters, interrupted a five -day streak of increases in US yields, which undermined the speculative demand for the US dollar.
Technical Analysis: XAG/USD continues to operate inside a bullish channel
La Plata has been operating irregularly and volatile during the last six weeks. However, the immediate trend maintains a moderate bullish bias, with the pair operating within an ascending channel from its minimum of June 24.
The 4 -hour relative force index rose above the level of 50, indicating an improved bullish impulse. However, precious metal needs to spread above the maximums of July 8 and 7, at 36.90 and 37.25, respectively, to confirm the positive trend.
Downward, a break in the support zone between the bottom of the channel, at 36.30 and the minimum of July 9 in 36.15 $ would indicate a change of trend and increase the pressure towards the area of ​​35.65 $ -35.75 $ (minimums of June 25, July 27 and July 1).
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.
