Current trends

The XAG/USD pair is trading around 29.90, poised to resume its decline amid a sharply stronger US dollar after the publication of the presidential election results. The USDX index has been growing for seven consecutive weeks and could renew the 2023 high of 107.00.

Positive dynamics are facilitated by the US inflation data published yesterday: at the end of October, the consumer price index (CPI) reached 2.6% year-on-year, in line with the forecast and exceeding the previous value of 2.4%, while the underlying indicator remained at 3.3%. Statistics indicate the stability of inflation, which remains above the target of 2.0%. Against this background, the US Federal Reserve may postpone the upcoming interest rate cut at its December meeting. In this case, monetary policy will remain tight longer than the market expects, which contributes to the growth of interest in the American currency.

According to the report of the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions in silver decreased to 53.3 thousand from 60.4 thousand last week. The “bulls” maintained the advantage, which, however, has narrowed amid the ongoing outflow of investors from the asset: according to the report on positions backed by real money, their balance was 48,813 thousand against 15,459 thousand for the “bears”. Last week, buyers closed 6,013 thousand transactions, and sellers increased their number by 2,083 thousand, which indicates the ongoing adjustment of positions in favor of the “bears”.

From the point of view of technical analysis, silver is trading in a long-term uptrend. At the moment, a correction is developing, during which sellers have broken through the support level of 30.40. The next sell target is the level of 27.83, near which the trend boundary is broken. If this mark is held by buyers, growth may continue with the first target at the level of 30.40. In addition, when the price returns to the level of 30.40, a signal will be formed to buy the instrument with the target of 32.40, and if this level is broken, the movement will continue to the area of 34.20, which buyers could not break through in October. The RSI (14) indicator after reaching the overbought area in October returned to the neutral zone and is approaching the oversold zone, the exit from which will mean the possibility of looking for buys.

The medium-term trend changed to a downtrend in early November: the target zone 32.46–32.22 was broken through, and this week the target zone 2 (30.06–29.82) was reached, in case of a breakout, the next target in the trend will be the target zone 3 (27.56–27.31). If buyers stay in the target zone 2, the price will start an upward correction, and then the XAG/USD pair can be expected to move to the trend border 32.47–32.22, after reaching which new sells can be considered with the main target at the minimum of this week at 29.74.

Support and resistance

Resistance levels: 32.40, 34.20, 35.50.

Support levels: 27.83, 26.55, 25.67.

Trading tips

Buy positions can be opened above 30.60 with a target of 32.40 and a stop-loss of 30.00. Implementation period: 9-12 days.

Sell positions can be opened below 29.35 with a target at 27.83 and a stop-loss at 30.05.