- Silver is trading above $24.50 on Monday as geopolitics remains the driving force in the market.
- Economic uncertainty related to new Western sanctions on Russia and reduced central bank tightening bets is supporting precious metals.
Silver prices (XAG/USD) They are trading higher this Monday in the $24.50 area, up almost 1.0% or about 25 cents on the day, supported by uncertainty related to the change in the global geopolitical order following the Russian invasion of Ukraine. The EU’s stance against Russia hardened significantly over the weekend.
Western countries will now ban some Russian banks from SWIFT, the CBR froze a large part of its foreign exchange reserves, and the EU will provide direct military aid to Ukraine after blocking its airspace to all Russian planes. There is considerable uncertainty about how these measures could affect global growth and the levels of uncertainty are not helped by the threatening tone of Russian President Vladimir Putin, who has ordered his nuclear deterrent forces to be on high alert.
As traders digest recent developments as the Russo-Ukrainian war rages on, it is not really surprising to see demand for safe-haven precious metals such as silver. XAG/USD bulls will take comfort in the fact that the metal appears to be finding good support at its 200-day moving average at $24.20. As global energy prices rise on fears of supply disruptions from Russia, demand for inflation protection is likely to remain high.
That, coupled with traders lowering their tightening bets from the Fed, ECB and other major central banks and the subsequent drop in global bond yields suggests that XAG/USD’s trade bias this week may tip to the upside. Although this week’s US data (Official Employment Report and ISM Surveys) are likely to show a strong recovery underway and the Fed’s speech is likely to reaffirm short-term tightening expectations, it is likely that XAG/USD bulls target last week’s highs of $25.62.
Additional technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
