- Silver prices breaks technical psychological resistance to USD 35.00, increasing prices to the highest level from February 2012.
- The expectations of the interest rate and the direction of the American dollar aid raise silver prices.
- The demand of unthreatening Haven still increases when investors are looking for shelter from trade tariffs and uncertainty and softer conditions of the labor market in the USA.
Silver (XAG/USD) increased rapidly on Thursday, collecting almost 4% of the endocrine and reaching the highest level for over a decade, because precious metals still attract investors in connection with the escalating commercial tension and increased the outflow of the US dollar.
The weakening of the American dollar (USD) has made silver more attractive to buyers, while intensifying commercial tensions, growing tariffs and wider economic uncertainty strengthened the dismissal of metal as classic unthreatening assets.
After growing above USD 36, a level that has not been evident since February 2012, the relative force indicator (RSI) has exceeded 69. Although this indicates a robust stubborn rush, it also serves as a potential warning that prices are approaching excessive territory.
Expectations for interest rates are provided by additional wind on silver
While economic perspectives remain uncertain, central banks are moving away from a restrictive monetary policy, which caused a decrease in interest rates throughout the year.
This provided an additional raise in silver prices that do not bring any refunds from keeping metal.
Because the ECB announces a reduction in the rate of 25 points (BPS) on Thursday, the US Federal Reserve (FED) is in the face of pressure at lower rates in response to the softening of economic data, especially on the American labor market.
On Thursday, the initial unemployed claims in the US increased to 247,000 in a week, which was higher than 240,000 prints last Thursday and above the expectations of analysts by 235,000 growth. Because investors look at the future at the Friday’s non -Farmy payroll (NFP), which will provide additional insight into the resistance of the American labor market, these editions are of key importance in shaping the expectations of the interest rate for the FED.
Silver often asked questions
Silver is a highly highly commercial metal among investors. It was historically used as a magazine of values and exchange medium. Although less popular than gold, traders can turn to silver to diversify their investment portfolio, due to its internal value or as potential security during high inflation periods. Investors can buy physical silver, in coins or in bars or replace them via vehicles such as stock funds that follow their price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the escalation of silver price due to its unthreatening status, although to a lesser extent than gold. As a resource without profitability, silver tends to grow at lower interest rates. His movements also depend on how the US dollar (USD) behaves because the resource is valued in dollars (xag/USD). A robust dollar tends to maintain the price of silver, while the weaker dollar will probably raise prices. Other factors, such as investment demand, mining supply – silver is much more ample than gold – and recycling rates can also affect prices.
Silver is widely used in industry, especially in sectors such as electronics or solar energy, because it has one of the highest electrical conductivity of all metals – more than copper and gold. An raise in demand can raise prices, and the decline tends to lower them. Dynamics in the United States, Chinese and Indian economy can also contribute to price fluctuations: for the USA, and especially China, their gigantic industrial sectors exploit silver in various processes; In India, consumer demand for precious metal for jewelry also plays a key role in setting prices.
Silver prices usually follow gold movements. When gold prices are rising, silver usually follows it because their status as unthreatening assets is similar. The ratio of gold/silver, which shows the number of ounces of silver needed to equalize the value of one ounce of gold, can aid determine the relative valuation between the two metals. Some investors can recognize a high ratio as an indicator that silver is underestimated or gold is overstated. On the contrary, low ratio may suggest that gold is underestimated in relation to silver.
