- The price of silver shoots up to about $ 32.60 amid the weakness of the US dollar.
- The Fed is almost sure of maintaining stable interest rates on Wednesday.
- The uncertainty in trade between the US and China continues to limit the fall in the price of silver.
The price of silver (XAG/USD) is recovering up to about $ 32.60 during negotiation hours in North America on Monday. White metal is strengthened while the US dollar (USD) falls at the beginning of the week, with the Federal Reserve Monetary Policy Meeting (FED) at the Center for Attention. Technically, a drop in the US dollar makes investment in the price of silver an attractive bet for investors.
The dollar index (DXY), which follows the value of the dollar against six main currencies, is down almost 0.5% around 99.50.
According to the CME Fedwatch tool, the operators are almost sure that the Central Bank will keep the stable interest rates on Wednesday. The tool also shows that the probability that the FED reduces interest rates in June has fallen to 32% from 66% seen a week ago. Operators have reduced Fed Rate Cutting Betting for the June meeting after the publication of data from USA (USA.) Non -agricultural payrolls (NFP) for April, which were better than projected.
Theoretically, an environment of high interest rates is unfavorable for assets without performance, such as silver.
Meanwhile, the decreasing hopes of a resolution of the commercial war between the US and China in the short term have also supported the price of silver. The demand for safe refuge assets, such as silver, increases in the midst of the growing geopolitical tension.
The president of the USA, Donald Trump, said Sunday that he will not talk to Chinese President Xi Jinping, this week, but expressed his willingness to reduce tariffs on China. “At some point, I will reduce them, because otherwise, you could never do business with them, and they want to do business with great force,” Trump said.
In the economic field, the US PMI data of the US ISMs for April have been better than expected. The PMI of services expanded at a faster rate, reaching 51.6 from 50.8 in March and estimates of 50.6.
Technical Analysis of La Plata
The price of silver fights to return to a maximum of more than three weeks around 33.70 $. The short -term white metal perspective has become uncertain as it falls below the 20 -day exponential (EMA) mobile average, which quotes around 32.65.
The 14 -day relative force (RSI) index falls below 50.00 after failing to break over 60.00, indicating that investors are no longer bullish.
Looking up, the maximum of March 28, $ 34,60 will act as a key resistance to metal. At the bottom, the minimum of April 11, $ 30.90 will be the key support zone.
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.
