Silver still buy on dips as far as double bottom remains intact

FXOpen

Silver once again closed in negative territory on Thursday showing significant level of weakness. The metal is expected to find a strong support around $19.60 – $19.65 zone, 23% fib level before resuming the upward movement that may last up to $20.83, where at least three resistance levels may be noted, making this region a triple confluence as highlighted in the following chart. 

Silver still buy on dips as far as double bottom remains intact

$20.83 is 50% fib level, 100 DMA as well as 200 DMA are also sitting in around the same level, enhancing the importance of this resistance zone. Thus based on these support and resistance levels the white metal may move in a manner as shown in the following chart;

Silver still buy on dips as far as double bottom remains intact

This typical movement is needed because the market has to print a Higher Low (HL) before going for Higher High (HH) as indicated in the above daily chart.

Similarly if we look at the weekly chart it is also very bullish for bullion as we can note a double bottom targeting $25 resistance, have a look;

Silver still buy on dips as far as double bottom remains intact

The neckline sits around $25 / ounce that would be a big hurdle for bulls. A break and close above the neckline will accelerate the bullish momentum targeting $30.

It is pertinent that the expenses incurred in the mining of Silver were standing at $21.39 in the third quarter of 2013. Thus, the cost of production is higher than the ongoing price of Silver which means miners are operating at net loss. If the price continuous to remain below the cost of mining; the minors would ultimately shut down the mining of Silver and then decrease in supply will cause bullish momentum in price.  So in short term a rise up to $25 will not be very much unusual; however the long term bias is still negative for bullion due to faster than expected recovery in developed economies.

So it is concluded that as far as double bottom remains intact, buying is a good option with a long term target of $25 / ounce. 

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 trading forex 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.

Latest from Forex Analysis

Market Analysis: The American Currency Resumes Growth EUR/USD Analysis: The Rate Updates Its Multi-month Low Market Analysis: Dollar Falls After Inflation Data Release Euro Analysis: ECB Cautions Against Rate Cuts Amid Inflation Battle Market Analysis: GBP/USD Struggles While EUR/GBP Eyes Increase

Latest articles

Shares

Top 5 Stocks to Watch in October: Bank on the Backfoot, No Thirst for Coca-Cola, Tech Giant Takes Dip and Electric Vehicle Volatility

October is here, and as the markets enter a new month, we take a closer look at five stocks that could be of significant interest to investors. 1) Bank of AmericaBank of America stock has taken a dive over the

Forex Analysis

Market Analysis: The American Currency Resumes Growth

The beginning of October turned out to be favourable for continued growth in the US dollar. From the data published yesterday, it follows that in September, the US manufacturing business activity index (PMI) rose to 49.0 against the forecast

Forex Analysis

EUR/USD Analysis: The Rate Updates Its Multi-month Low

Never in its history has the euro fallen for 11 weeks in a row against the dollar, but it happened. The minimum has been set for 2023. The reason seems to be that in an environment where central banks are

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.