XAG / USD Slumps Nearly 2% Amid Risk Averse Climate

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  • XAG / USD follows the discovery of a new variant of COVD-19 in South Africa.
  • The risk-off mood spurred by the UN COVID-19 variant sparked a selloff in the precious metals segment.

La plata (XAG / USD) It extends its losses from the night session, shedding 1.91% on the day, trading at $ 23.14 during the American session at the time of writing. The discovery of a new variant of COVID-19 called NU in South Africa affected market sentiment.

South Africa discovered a new variant of COVID-19, which affected market sentiment

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According to various media, the world scientific community is on alert. There is a possibility that the new COVID-19 “NU” variant discovered in South Africa is more virulent than Delta and resistant to vaccines. The scientists said it has many mutations in the spike protein, and it is the “most evolved” variant of the original virus ever discovered.

In the evening session, the XAG / USD reached a daily high at $ 23.70. However, once the level was reached, the UN COVD-19 news triggered a $ 0.40 drop that found a follow-up as the American and European session progressed. In the past few hours, silver broke below $ 23.00, but rebounded away from Friday’s low of $ 22.87, recovering the $ 23.00 level at the time of writing.

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Meanwhile, the US dollar index, which tracks the dollar’s performance against a basket of six rivals, falls 0.60% to 96.15, supported by falling US Treasury yields. , with the 10-year yield, losing 14 bp, down 1.50%.

Therefore, COVID-19 developments would be the main drivers for silver and commodity traders. It is worth noting that gold is trading at a heavy loss, losing around $ 15.00 on the day to $ 1,785 as of press time. In addition, Western Texas Intermediate (WTI), the US crude oil benchmark index, is down 11.63%, trading at $ 68.91.

XAG / USD Price Forecast: Technical Outlook

Silver (XAG / USD) has a bearish bias, as shown by the daily moving averages (DMA) that reside above the spot price. That, coupled with the Relative Strength Index (RSI) at 36, indicates that the non-yielding metal still has enough room to spread lower.

In the result of extending the downtrend, the first demand zone would be the $ 23.00 level. A break of the latter would expose crucial support levels, such as the October 12 low at $ 22.34, followed by the key psychological level $ 22.00.

Additional technical levels

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