- A series of technical buying has sent XAG / USD prices back above $ 24.00 in the recent trade.
- The weakness of the USD amid an improvement in the market’s broad appetite for risk is likely to act as support.
Silver Spot Prices (XAG / USD) they have seen some technical buying in recent trading, but remain generally supported by a weaker USD as a result of better risk appetite earlier in the week. In fact, the dollar index (DXY) recently fell to new annual / multi-year lows below 90.50. Currently, the XAG / USD is up about 1% on the day or just under 25 cents and is trading above $ 24.00.
USD declines as risk appetite gets a boost
A couple of factors are driving risk appetite (and hurting the USD) on the first trading day of the week; firstly, the FDA approved the Pfizer / BioNTech vaccine for emergency use over the weekend and secondly, the British Prime Minister, Boris Johnson, and the president of the EU Commission, Ursula von der Leyen, agreed over the weekend to continue Brexit talks (although the GBP rallied on this, we do not by any means guarantee a deal).
The risk appetite has not reacted much to the negative news on the European blockade front; Germany is set to introduce stricter restrictions until January, the Netherlands have just announced that they will do the same, and in the UK, London will enter the highest alert category for Covid-19 (Level 3), which could happen as soon like today. Markets are apparently still more focused on the “light at the end of the tunnel” narrative as vaccines are released.
Either way, USD weakness is apparently offering the precious metal complex some support Monday. It’s true that gold is still trading in the red, but the losses are possibly less given negative USD flows and silver is trading green.
Technical buying pushes XAG / USD back above $ 24.00
A series of technical buying following the breakout of a short-term downtrend linking the highs on December 9, 10 and 11 has apparently helped silver prices rebound to the $ 24.00 level. But looking at the precious metal on a longer time horizon, silver is still trading well within recent ranges. To the upside, there is decent resistance in the area from $ 24.30 to $ 24.40, while to the downside, the bottom of the recent range comes into play just before the $ 23.50 level.
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