Silver Prices Face Resistance at $31.00 Amid Rising US Bond Yields
- Silver struggles at $31.00, declines over 1% to test the 100-day SMA amid rising US bond yields.
- Technical outlook sees potential consolidation between the 100-day and 200-day SMAs, with key support at $29.49.
- Resistance levels ahead at $31.00 and $31.64, with potential upward movement towards $32.00 if regained.
Silver prices faced a setback on Friday as they dropped below $31.00. Despite expectations of a rate cut by the US Federal Reserve next week, rising US bond yields are putting pressure on the precious metals market. The XAG/USD is currently trading at $30.53, down more than 1%, testing the 100-day Simple Moving Average (SMA).
XAG/USD Price Forecast: Technical Outlook
The upcoming events next week will play a crucial role in determining Silver’s trajectory for the remainder of the year. While the metal is poised to end the year with gains of over 30%, in the short term, it may consolidate between the 100-day SMA and the 200-day SMA at $29.49.
If buyers manage to push prices above $31.00, the next resistance level to watch is the 50-day SMA at $31.64. A breakthrough above this level could pave the way for a move towards $32.00 and potentially even higher to $33.00.
On the flip side, if sellers drive prices below the 100-day SMA, the next support zone lies around the $30.00 mark. Breaking below this level could lead to a test of the November 28 daily low at $29.64 before reaching the 200-day SMA.
XAG/USD Price Chart – Daily
Silver FAQs
- What is Silver?
Silver is a precious metal that is highly traded among investors. It has been historically used as a store of value and a medium of exchange. Traders often turn to Silver to diversify their investment portfolio, for its intrinsic value, or as a potential hedge during periods of high inflation.
- What factors influence Silver prices?
Silver prices can be influenced by various factors such as geopolitical instability, economic recession fears, interest rates, US Dollar performance, investment demand, mining supply, and recycling rates. The metal is also widely used in industries like electronics and solar energy, which can impact its price.
- How does Silver relate to Gold?
Silver prices often follow the movements of Gold. The Gold/Silver ratio can help determine the relative valuation between the two metals, with a high ratio indicating potential undervaluation of Silver or overvaluation of Gold, and vice versa.
Analysis
The current scenario in the Silver market highlights the challenges faced by the metal as it struggles to maintain its price above $31.00 amidst rising US bond yields. Investors should closely monitor the upcoming events next week, as they could provide a clear direction for Silver’s performance in the short term.
Key support levels at $29.49 and resistance levels at $31.00 and $31.64 will be critical in determining the metal’s next moves. Factors such as interest rates, US Dollar performance, and global economic dynamics will continue to influence Silver prices in the coming weeks.
For investors looking to diversify their portfolios or hedge against inflation, understanding the dynamics of the Silver market and its correlation with Gold can provide valuable insights into potential investment opportunities. Keeping a close eye on technical indicators and market trends will be essential in navigating the volatility of the precious metals segment.