Silver all set for sharp rebound amid supply concerns

FXOpen

Silver once again fell on Friday as upbeat data lifted the greenback. White metal has however started showing signs of bullish strength which means a reversal might be in play very soon.

The metal is being traded around $19.13 per ounce at 06:09 GMT in Asia. Immediate support is seen around $18.98 which is low of January 30; a break below this level shall target $18.62 i.e. low of 31st December and double bottom support zone. A fall below $18.62 may push the white metal into deeper bearish trend targeting $17.00.

Silver all set for sharp rebound amid supply concerns

On upside, resistance may be noted around $19.66 that is 23.6% fib level and 55 Daily Moving Average (DMA), a break above shall target $20.28 which is 100 DMA and 38.2% fib level ahead of $20.83 i.e. 200 DMA and 50% fib level.

Relative Strength Index (RSI) as well as Commodity Channel Index (CCI) both are dipping below oversold territory. In addition, positive divergence can also be noted with MACD which means a bullish reversal could be in play very soon.

It is pertinent that current market price of silver is well below its cost of production thus miners are operating at loss, they might not afford loss for a longer period of time and ultimately consider closing down their mines. This will create steep fall in Silver production and in turn price will tend to rise.

Last week we saw a number of upbeat reports about the US economy that lifted the greenback considerably. Federal Open Market Committee (FOMC) trimmed monthly bond purchases by $10 billion to $65 billion on Wednesday. A day after, commerce department figures showed that consumer spending surged to the highest level since 2010 and consequently world’s largest economy grew at 3.2% in fourth quarter. Since USD is negatively correlated with silver price, so we saw significant fall in white metal price.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

USD/JPY Analysis: Prospect of a Breakout of the Level of 155 Yen per Dollar Market Analysis: EUR/USD Nosedives While USD/JPY Extend Rally Analysis: EUR/USD Close to Year’s Low after ECB Decision USD/JPY Rises to Highest Since 1990 The US Dollar Rose Sharply after Inflation Data. When Is Correction Possible?

Latest articles

Is There the Best Time to Trade Stock CFDs?
Trader’s Tools

Is There the Best Time to Trade Stock CFDs?

If you ask experienced traders, many will say that they trade on certain days or at certain times of the day. Their choice is determined by the market dynamics, volatility, and liquidity. It’s crucial to understand when the best

Shares

UnitedHealth (UNH) Share Price Surges after Strong Report

UnitedHealth shares surged Tuesday, rising more than 5% after the health care giant delivered stronger-than-expected first-quarter 2024 results:

→ earnings per share: actual = USD 6.91, expected = USD 6.61, last quarter = USD 6.16;
→ gross income: actual = USD 94.4

Forex Analysis

USD/JPY Analysis: Prospect of a Breakout of the Level of 155 Yen per Dollar

The USD/JPY rate has consistently reached new highs since 1990, approaching the psychological level of 155 yen per US dollar. The Japanese currency has already fallen about 9% against the dollar this year.

This is supported by Jerome Powell,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.