XAG/USD rises above $30.00, driven by a weaker US Dollar.
FUNDAMENTAL OVERVIEW:
- Silver prices gain momentum as a weakening US Dollar enhances affordability for buyers using foreign currencies.
- The US dollar struggles amid reports that the Trump administration plans to take a more focused approach to tariffs.
- Meanwhile, silver demand rises as China pledges to implement “more proactive” macroeconomic policies and reduce interest rates to stimulate economic growth.
Silver prices (XAG/USD) continue their upward momentum for the fourth consecutive day, trading around $30.20 per troy ounce during European trading hours on Tuesday. The dollar-denominated grey metal benefits from a weaker US Dollar (USD), which enhances its affordability for foreign currency buyers and drives increased demand for Silver.
The US Dollar Index (DXY), which measures the USD’s performance against six major currencies, remains under pressure for a third consecutive session. This follows reports suggesting that the incoming Trump administration may adopt a more focused approach to applying tariffs. As of now, the DXY has dropped to nearly 108.00.
Trump denied a Washington Post report claiming that his team was considering narrowing the focus of his tariff plan to target only critical imports. The US Dollar could receive some support following President-elect Donald Trump’s statement that his tariff policy will remain unchanged.
The US ISM Services Purchasing Managers Index (PMI) will be released on Tuesday, with markets also looking ahead to the Federal Reserve’s December meeting minutes on Wednesday. On Friday, the US employment data for December will be closely watched, as it may provide insights into the Fed’s interest rate outlook for 2025.
Silver demand was further supported by an optimistic economic forecast in China, the world’s largest consumer of the metal. Beijing has recently pledged to implement “more proactive” macroeconomic policies and reduce interest rates this year to stimulate economic growth.
XAG/USD TECHNICAL ANALYSIS H4 CHART:
Technical Overview:
XAG/USD is trading within an up channel.
XAG/USD is moving above all Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 30.34
Immediate support level: 29.83
HOW TO TRADE XAG/USD
“Following a notable uptrend, silver experienced a significant sell-off. It has now stabilized at a key support level and formed a double-bottom reversal pattern. This pattern was confirmed with a breakout above the resistance zone. Silver is currently trading above this resistance, indicating bullish momentum towards the next price target. However, a pullback to retest the breakout level is possible before the uptrend resumes.”