- Silver has recovered from a test of the $ 23.00 level, the precious metal is currently trading around $ 23.40.
- USD weakness appears to offer some support to the precious metals space on Wednesday.
Silver prices (XAG / USD) They are making a modest return on Wednesday as the precious metal appears to break the losing streak on Monday and Tuesday that has taken it from Monday’s open levels above $ 24.00 to lows below $ 23.00. Precious metals are currently trading with gains of around 10 cents or 0.5%, having rebounded from $ 23.00 to around $ 23.40.
Silver supported as the USD struggles
USD weakness will finally come to the aid of precious metals on Wednesday; Usually precious metals like gold and silver are negatively correlated with the USD, which has fallen from highs around the 92.80 mark to a low of 92.00 in recent trading.
Goldman Sachs attributes the lack of appetite for precious metals despite the weakening of the USD on Monday and Tuesday due to the fact that despite the significant rallies seen in other asset classes, there was no increase in inflation expectations of balance, which boosted gold in late spring / summer.
But the usual correlation appears to have reasserted itself on Wednesday. The USD has been on the defensive amid unfavorable conditions; Risk appetite is being supported by vaccine optimism (negative for safe havens like the USD), as well as the fact that the US economy appears to be improving than expected in the fourth quarter, but not enough. Concerns regarding the difficult incoming winter during which the Covid-19 outbreak is expected to continue to affect the recovery. While it could be argued that growing concerns about the short-term outlook for the US economy could be a positive value for the USD given its safe-haven appeal, if that means more accommodation from the Fed (such as time through an expanded QE program in December), then this is more likely to be negative in net dollars.
Silver tests long-term uptrend
XAG / USD briefly dipped below a long-term uptrend linking September 24 lows at $ 21.68 and October 29 highs at $ 22.60 on Tuesday and Wednesday, but has rebounded again above in the recent operations.
If the bears regain control and drive the pair down, these will be the most important support levels to watch for in the immediate sense. Below the September 24 low is the July 4, 2016 high at $ 21.15.
To the upside, the most notable resistance area is a downtrend linking the highs of August 7, September 1, and November 9, which will likely come into play as resistance just before $ 24.50.
8 hour chart
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