- Silver prices extend losses while the bullish impulse remains on overcompra field.
- The US president confirms positive advances with China, which raised silver to maximum of several decades.
- The price action of the XAG/USD remains above $ 36.00 with the relative force index (RSI) in 67.
Silver prices are decreasing on Wednesday, going back from maximums of several years as the bullish impulse fades and operators ensure benefits.
The metal is currently near the psychological support zone of 36.00, having tried its highest levels since February 2012 earlier this week.
On Tuesday, the high -level negotiations between the US and China concluded in London with a provisional framework, reviving the hopes of a restart in bilateral commercial cooperation.
The president of the United States, Donald Trump, commented on commercial conversations on Wednesday, stating that: “We have made real progress with China. It is equity, and we are close to something that could work for both countries. I will not sign anything weak.”
The Vice Primer Chinese Minister, He Lifeng, added that “China’s position on commercial problems with the US is clear and consistent. Both parties must strive to establish stable commercial and economic ties already long term.”
Optimism initially supported the feeling of industrial demand, helping to raise silver. However, with the prices already overcapted, extended profits remained limited.
Silver prices go back from overcompra territory
La Plata exceeded the key resistance in the maximum of October 2012 of 35.96 $, but failed to maintain the impulse above $ 36.65, forming a maximum in the short term just below $ 37.49, the next important level of resistance.
The immediate support is now observed in the simple mobile average (SMA) of 10 days of 35.12 $, followed by the area of ​​35.00 –34.87 $, which marks a level of prior rupture and a Fibonacci base.
GRAPH DIARY OF LA PLATA
A deeper decrease could expose $ 34.00 and then the 50 -day SMA at $ 33.01, while a sustained movement would require a break above $ 37.49.
The Relative Force Index (RSI) in 67 remains close to the territory of overcompra, indicating a stretched bullish impulse and a greater probability of additional consolidation or a short -term setback.
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.
