Silver struggles to capitalize on the previous day’s strong move up to the weekly high, with a mixed technical setup warranting some caution before placing fresh directional bets. A potential weakness below $36.00 could be seen as a buying opportunity, remaining cushioned near the $35.50-$35.40 horizontal support. During the Asian session on Thursday, silver (XAG/USD) attracted sellers near the $36.55-$36.60 region, eroding part of the previous day’s strong move.
The white metal currently trades around the $36.40-$36.35 area, down 0.50% for the day, as traders keenly await the release of the US Non-Farm Payroll (NFP) report before placing fresh directional bets. From a technical perspective, the Moving Average Convergence Divergence (MACD) histogram and signal line have turned lower on the daily chart. However, the Relative Strength Index (RSI) remains above 50, signaling caution for the bears.
A subsequent fall below the $36.00 mark is likely to be seen as a buying opportunity, with support expected near the $35.50-$35.40 area. This horizontal support now acts as a key pivotal point, with a convincing break below potentially prompting technical selling and paving the way for a slide towards the $35.00 mark. Continued selling could make silver vulnerable to further declines toward intermediate support around the $34.75 area before eventually dropping to the next relevant support near the $34.45 region.
On the flip side, sustained strength and acceptance beyond the $36.55-$36.60 supply zone could see silver make a fresh attempt towards the $37.00 mark, with momentum possibly extending towards the $37.30-$37.35 region, or the highest level since February 2012 touched earlier this month. Follow-through buying would set the stage for an extension of the nearly three-month-old uptrend.
Silver hesitant before key economic data
Silver is widely used in industry, particularly in electronics and solar energy sectors due to its high electrical conductivity. An increase in industrial demand typically drives prices higher, while a decline exerts downward pressure. Economies such as the US, China, and India significantly impact silver demand, with China’s large industrial sector and India’s jewelry demand playing crucial roles.
Silver prices often follow gold’s movements due to their similar status as safe-haven assets. The Gold/Silver ratio, indicating the number of ounces of silver needed to equal one ounce of gold, helps determine their relative valuation. A high ratio may suggest silver is undervalued or gold is overvalued, while a low ratio might indicate the opposite.
Investors should remain mindful of silver’s key support and resistance levels, and monitor industrial demands, geopolitical factors, and economic data releases. Any investment decisions should be backed by thorough research, considering the high risks involved in trading. This article contains forward-looking statements that involve risks and uncertainties.
Readers should do their own thorough research before making any investment decisions. Markets and instruments profiled are for informational purposes only and not a recommendation to buy or sell any assets. The views and opinions expressed are those of the authors.
