The Rise of Silver Prices Amid Geopolitical Tensions
As the world grapples with heightened geopolitical tensions, the price of silver has seen a mild recovery, surpassing the $31.00 mark. This surge comes in the wake of escalating conflict between Russia and Ukraine, prompting investors to seek refuge in safe-haven assets like silver.
Geopolitical Developments
- Ukraine’s deployment of UK-supplied missiles into Russia has fueled fresh concerns of a potential world war.
- Historically, assets such as silver tend to gain appeal during periods of uncertainty and geopolitical risks.
Market Uncertainty
The outlook for silver remains uncertain as investors speculate on the Federal Reserve’s upcoming December meeting. The probability of a 25 bps interest rate cut has decreased from 72% to 56%, adding to market volatility.
Meanwhile, the US Dollar Index hovers around 106.60, while 10-year US Treasury yields remain steady at 4.40%.
S&P Global PMI Data Release
Investors are eagerly anticipating the release of the preliminary S&P Global PMI data for November, scheduled for Friday. Analysts expect an improvement in overall private sector activity.
Silver Technical Analysis
Silver prices are approaching an upward-sloping trendline around $29.00, supported by the 200-day Exponential Moving Average (EMA). Resistance is seen near the 20-day EMA at $31.40.
The breakdown of a key horizontal support level has added to selling pressure on the asset, with the 14-day Relative Strength Index (RSI) nearing 40.00. A sustained decline in RSI could signal further bearish momentum.
Silver Daily Chart
Silver FAQs
Silver is a precious metal with a rich history of being traded among investors for its intrinsic value and potential as a hedge during uncertain times. Here are some key points to note about silver:
- Silver can be bought in physical form or traded through Exchange Traded Funds.
- Factors influencing silver prices include geopolitical instability, interest rates, USD performance, and demand in key industries like electronics and solar energy.
- Silver prices often follow gold trends, with the Gold/Silver ratio offering insights into their relative valuations.