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Silver trades at lowest level since July 2020 on dollar buying and bearish technicals


Silver falls to its lowest level since July 2020

The price of money

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Silver is a precious metal that is commonly traded on exchanges or through brokers. It is much more affordable than gold and thanks to its importance as an industrial metal as well as its volatility, it is widely traded. For traders in precious metals, gold is a much more popular market. Large institutions buy gold as a currency hedge when real interest rates and returns on other assets become unacceptable. Central banks will buy gold, not silver, as a reserve asset to diversify their currency exposure. Instead, money functions more strongly as a commodity than as a currency. Silver, also known as the white metal, is commonly tied to gold and the relationship between the two often dictates its price. The entire silver market is currently only worth around $540 billion, making it much smaller than other markets. Despite its smaller market share, the price of silver can swing wildly without much money entering it. The supply of silver is only increasing by 1-3% each year, and about half of the market is consumed by industry (unlike gold, which is more limited in its use). In August 2020, there were 19.2 billion ounces of silver reserves in the world (meeting certain purity standards) against 1.83 billion ounces of gold reserves. Both are typical offerings from retail brokers. Investing in silver CFDs saves you the hassle of paying for silver storage. Additionally, CFDs give you the ability to trade silver both ways. Many retail investors prefer to trade silver through CFDs with brokers because there are no large fees for physical delivery or commission which can erode potential profits.

Silver is a precious metal that is commonly traded on exchanges or through brokers. It is much more affordable than gold and thanks to its importance as an industrial metal as well as its volatility, it is widely traded. For traders in precious metals, gold is a much more popular market. Large institutions buy gold as a currency hedge when real interest rates and returns on other assets become unacceptable. Central banks will buy gold, not silver, as a reserve asset to diversify their currency exposure. Instead, money functions more strongly as a commodity than as a currency. Silver, also known as the white metal, is commonly tied to gold and the relationship between the two often dictates its price. The entire silver market is currently only worth around $540 billion, making it much smaller than other markets. Despite its smaller market share, the price of silver can swing wildly without much money entering it. The supply of silver is only increasing by 1-3% each year, and about half of the market is consumed by industry (unlike gold, which is more limited in its use). In August 2020, there were 19.2 billion ounces of silver reserves in the world (meeting certain purity standards) against 1.83 billion ounces of gold reserves. Both are typical offerings from retail brokers. Investing in silver CFDs saves you the hassle of paying for silver storage. Additionally, CFDs give you the ability to trade silver both ways. Many retail investors prefer to trade silver through CFDs with brokers because there are no large fees for physical delivery or commission which can erode potential profits.
Read this term experienced a sharp decline. Since its last peak at $26.21, the price has fallen 16 of the past 18 trading days. Today the price made a new cycle low but rebounded and is trading higher on the day. The low price reached $20.46 today before bouncing back. The price is currently $20.99.

The run from the April 18 high to today’s low has subtracted $5.75 from the price, or nearly -22%. The sharp rise in the dollar along with the negative technicals helped push the price down.

Technically, looking at the daily chart above, on April 25, the price fell below the 100 and 200 day converged moving averages. Earlier on March 30, the price bounced off its 200-day moving average. The drop below and the 100 and 200 day MA turned buyers into sellers.

More recently this week, the price broke below a technical zone between $21.429 and $22.01. It would now take a move above this swing zone to give the buyers a win. Without it and sellers have more control.

Based on the hourly chart below, the downtrend may have remained mostly below its 200 hourly moving average. There was a brief move above this moving average on May 5th (on 2 separate occasions) but these breaks failed and on May 6th the price broke below the 100 hourly moving average and remained below this moving average since then.

The current 100 hour MA is $21.36. A move above this level and then the 200 hourly MA (blue and green lines) at $21.938 is needed to give buyers more control. The 200-hour MA is near the top of the swing zone on the daily chart at $22.01. Breaking above $22.00 is therefore a key target to reach and break through on the upside next week. Without it, and sellers retain full control.

Silver trades at lowest level since July 2020 on dollar buying and bearish technicals

Money tends to go down


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