Silver prices advanced, supported by a weaker US Dollar. The metal finds support from safe-haven inflows as tensions in the Russia-Ukraine conflict escalate.
Silver recovered from two-month lows as the US Dollar experienced profit-taking after a recent rally. This rally was fueled by expectations of fewer Fed rate cuts and optimism about US economic outperformance under the incoming Trump administration.
This week, attention turns to Fed policymakers, with seven officials set to deliver speeches. Futures indicate a 60% chance of a December rate cut, though inflation concerns and rising Treasury yields may lead the Fed to adopt a more cautious stance.
Silver is also gaining traction amid rising geopolitical tensions. US President Joe Biden authorized Ukraine to use US-made weapons for strikes deep within Russia, a move that escalated concerns in the region. In response, the Kremlin issued a warning on Monday, vowing to retaliate against what it called a reckless decision by the Biden administration.
Markets are closely monitoring China’s upcoming Loan Prime Rate decision, anticipating potential additional stimulus measures to support economic growth. This follows the recent 10 trillion Yuan debt package, which did not include direct economic stimulus, heightening market concerns.
As one of the world’s largest manufacturing hubs for electronics, solar panels, and automotive components, China’s industrial demand for Silver remains a key factor influencing its price.
Silver has emerged as the standout performer in the precious metals sector, achieving an extraordinary 42.4% gain from January through October 2024.
Technical Analysis
Source: TradingView
XAG/USD moved above the 30.6 level, pausing the bearish correction that began around 34.8 and is showing signs of recovery from this support. The price is trading above the 100 EMA, which may indicate a potential retest of the pivot area around 32.5 as the market looks to recover previous levels.
However, if the price faces resistance near 31.6, traders will be watching for a potential move back toward the support zone around 30.2, keeping the broader range in focus. As always, further price action will depend on market dynamics and developments.
