- The price of silver recovers initial losses and is about $ 36.70 while investors expect the result of commercial conversations between the US and China.
- Washington has expressed confidence that commercial conversations between the US and China are going well.
- It is estimated that inflation in the US has grown at a faster rate in May.
The price of silver (XAG/USD) recovers initial losses and bounces about $ 36.70 from the minimum intradic of 36.30 $ during European negotiation hours on Tuesday. White metal is recovered in the midst of uncertainty about the result of commercial conversations between the United States (USA) and China in London, which have entered their second day.
During European negotiation hours, the White House has indicated that commercial discussions between the two nations are going well and the negotiation will continue throughout the day.
Theoretically, optimism about commercial discussions between the US and China should reduce the demand for shelter assets, such as silver.
Meanwhile, the US dollar index (DXY) calmly quotes around 99.70, waiting for the minutes of the meeting between the US and China.
At the domestic sphere, investors expect the US Consumer Price Index (CPI) for May, which will be published on Wednesday. Inflation data is expected to show that price pressure grew at a faster rate.
The signals of accelerated inflationary pressures would allow the Federal Reserve (FED) to maintain interest rates at their current levels for a longer time.
The attractiveness of the silver price increases in an environment of high inflation, higher interest rates by the Federal Reserve (FED) foresee a bad future for assets without performance, such as silver.
Technical Analysis of La Plata
The price of La Plata advances to about 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 $ 34.34 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.
