Silver continued to trade within a tight range, holding off the daily triangle formation following an upbeat China manufacturing report and Federal Open Market Committee (FOMC) minutes. The sentiment remains bullish due to Higher High (HH) in the recent upward rally.
Technical Analysis
As of this writing, the white metal is being traded around $19.48 an ounce. A support may be noted near $19.45, the lower trendline as demonstrated in the following chart. A break and daily closing below the trendline will push the precious metal into bearish territory, opening doors for the double bottom support area.
![xagusd-d1-capital-trust-markets[1]](https://www.fxopen.com/blog/en/content/images/2014/05/xagusd-d1-capital-trust-markets1.png)
On the upside, the white metal is likely to face a hurdle near $19.78, the upper trendline resistance. An upside breakout through the daily triangle will open doors for the $22.00 handle in the long run.
China Manufacturing
Manufacturing in China—the largest consumer of gold and silver—remained better than expectations during May with 49.7 points reading as compared to 48.1 points in the month before, a report by the HSBC Holdings revealed on Wednesday. Better than expected Manufacturing Purchasing Managers Index (PMI) report is seen as bullish for Silver and vice versa.
US Monetary Policy Outlook
The Federal Open Market Committee (FOMC) policymakers advocated for a clear explanation on the forward guidance stance after a major dip in the US unemployment rate which fell from 6.6% to 6.3% in April, the lowest level since the recession of 2008. The policymakers wanted the Fed to give a timeframe for the first rate hike, the development was seen as dovish for the US Dollar (USD).
Conclusion
The overall fundamental outlook coupled with the recent supply concerns about Silver will continue to act as a major support for the white metal, thus we do not expect a major correction in the price of white metal anytime in the near future.
Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
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.
