Silver (XAG/USD) rises towards $31.50, driven by a weaker US Dollar
FUNDAMENTAL OVERVIEW:
- Silver prices are rising, boosted by a softer US Dollar, making dollar-denominated metals more affordable.
- The metal also benefits from safe-haven inflows as the Russia-Ukraine conflict intensifies.
- However, silver faces resistance as non-yielding assets grapple with headwinds from Fed Chair Jerome Powell’s remarks, which lowered expectations for imminent rate cuts
Silver prices (XAG/USD) are extending gains for the second consecutive day, trading around $31.30 per ounce during Tuesday’s Asian session. The dollar-denominated metal has rebounded from two-month lows as the US Dollar undergoes profit-taking after its recent rally. This surge was driven by expectations of fewer Federal Reserve rate cuts and optimism regarding the US economy’s performance under the incoming Trump administration.
Safe-haven demand for silver is rising amid escalating geopolitical tensions. U.S. President Joe Biden authorized the use of U.S.-made weapons by Ukraine for strikes deep within Russian territory, raising concerns in the region. In response, the Kremlin issued a warning, pledging retaliation against what it called a reckless move by the Biden administration, while also stressing that such actions could significantly heighten the risk of a NATO confrontation. These developments are driving more investors toward silver as a protective asset.
Markets are closely watching China’s upcoming Loan Prime Rate (LPR) decision, anticipating potential stimulus measures to support economic growth. This follows the recent 10 trillion-yuan debt package, which did not include direct economic stimulus, raising concerns in the market. As one of the largest global manufacturing hubs for electronics, solar panels, and automotive components, China’s industrial demand for silver plays a crucial role in influencing silver prices.
XAG/USD TECHNICAL ANALYSIS CHART:
Technical Overview:
XAG/USD is currently trading within a up channel.
XAG/USD is positioned above 10&50 Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 31.50
Immediate support level: 30.95
HOW TO TRADE XAG/USD
Silver (XAG/USD) had a rollercoaster ride, soaring to new heights before being abruptly pulled back. After a significant decline, it found a solid footing at a key support level. Now, having broken through resistance, it’s poised for further gains. A successful retest of the recent support zone would reinforce this bullish outlook.