Tag: Silver

  • XAG/USD trades with positive bias below mid-.00s

    XAG/USD trades with positive bias below mid-$32.00s


    • Silver attracts some buyers on Tuesday and snaps a two-day losing streak. 
    • Mixed technical indicators on the daily chart warrant some caution for bulls. 
    • Corrective slides could be seen as a buying opportunity and remain limited.

    Silver (XAG/USD) builds on the previous day’s modest bounce from the vicinity of the $32.00 mark, or a nearly one-week low, and gains some positive traction during the Asian session on Tuesday. The white metal, for now, seems to have snapped a two-day losing streak and currently trades just below mid-$32.00s, up 0.25% for the day. 

    From a technical perspective, the recent repeated failures to find acceptance above the $33.00 mark and the subsequent pullback warrant caution for bullish traders amid mixed oscillators on the daily chart. Hence, it will be prudent to wait for sustained strength and acceptance above the said handle before positioning for an extension of a well-established uptrend from sub-$29.00 levels, or the year-to-date low touched in January. 

    The XAG/USD might then aim to surpass the monthly swing high, around the $33.40 area touched on February 14, and climb further towards reclaiming the $34.00 mark. The momentum could extend further towards the $34.45 intermediate hurdle en route to the $35.00 neighborhood, or the multi-year peak touched in October. 

    On the flip side, the $32.10-$32.00 area now seems to have emerged as an immediate strong support ahead of the $31.75 region. Any further slide could be seen as a buying opportunity and help limit the downside for the XAG/USD near the $31.25 zone. The latter coincides with the 100-day Simple Moving Average (SMA) and should act as a key pivotal point. Hence, a convincing break below might shift the bias in favor of bearish traders. 

    The subsequent decline has the potential to drag the XAG/USD below the $31.00 round-figure mark, towards testing the the next relevant support near the $30.25 region, the $30.00 psychological mark, and the $29.55-$29.50 horizontal zone.

    Silver daily chart

    Silver FAQs

    Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

    Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

    Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

    Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

     



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  • XAG/USD trades with positive bias below mid-.00s

    XAG/USD remains steady near $32.50, three-month highs


    • Silver price holds ground near its three-month high of $32.56, recorded on February 5.
    • The upside of the Silver appears limited as the US Dollar gains ground amid rebounding US Treasury yields.
    • Traders await US Nonfarm Payrolls to gain fresh impetus regarding the Fed’s monetary policy direction.

    Silver price (XAG/USD) remains in positive territory for the fifth consecutive session, trading around $32.30 per troy ounce during Asian hours on Friday. The precious metal maintains its position near its three-month high of $32.56, recorded on February 5. Traders are awaiting key US labor market data, including Nonfarm Payrolls (NFP), which could influence the Federal Reserve’s (Fed) monetary policy direction.

    However, Silver’s upside appears limited as the US Dollar (USD) extends its recovery amid rebounding US Treasury yields. The US Dollar Index (DXY), which tracks the USD against six major currencies, has climbed near 107.70, while 2-year and 10-year US Treasury yields stand at 4.22% and 4.43%, respectively, at the time of writing.

    Safe-haven metals like Silver have gained ground amid heightened risk aversion due to global trade and economic uncertainties. However, trade negotiations between the United States (US) and China could temper this sentiment. US President Donald Trump and Chinese President Xi Jinping are set to discuss potential tariff rollbacks, which could ease market concerns and limit Silver’s upside.

    Diminished fears of a US-China trade war also reduce the risk of rising US inflation, reinforcing expectations of two Federal Reserve rate cuts this year. As a non-yielding asset, Silver benefits from a dovish stance by major central banks.

    Meanwhile, the Reserve Bank of India (RBI) is expected to announce a 25-basis-point rate cut on Friday. Last week, the European Central Bank (ECB) lowered its Deposit Facility Rate by 25 basis points to 2.75%, while the People’s Bank of China (PBoC) has signaled potential rate cuts. Additionally, the Bank of Canada (BoC) has paused its quantitative tightening, and Sweden’s Riksbank has cut interest rates.

    Silver FAQs

    Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

    Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

    Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

    Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

     



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  • Dollar Unfazed by Core Inflation Uptick, Loonie Muted on GDP Contraction

    Dollar Unfazed by Core Inflation Uptick, Loonie Muted on GDP Contraction


    Forex markets remain largely subdued today, with Canadian Dollar being the exception as volatility rises ahead of the implementation of US tariffs tomorrow. Canada is reportedly well prepared to respond with retaliatory measures on US imports worth up to CAD 150B. This comes at a time when Canada’s economy is already under pressure, with November’s GDP data showing a larger-than-expected contraction. However, despite the looming economic strain, Loonie’s selloff remains contained for now, as traders assess the full impact of trade retaliation.

    Meanwhile, Dollar shrugged off the latest PCE inflation data, which showed an uptick in the headline rate while core inflation remained at elevated levels. Fed Governor Michelle Bowman noted at an event that while rate cuts are still expected, their timing will depend on incoming data, given persistent inflation risks. The latest data reinforces Fed’s cautious approach, suggesting that policymakers are unlikely to act at least until Q2.

    For the week, the broader currency market picture remains unchanged. Yen continues to lead as the strongest performer, followed by Dollar and Swiss Franc. Aussie remains the weakest, followed by Kiwi and Euro. British Pound and Loonie sit in the middle.

    Technically, as Gold is extending its record run, Silver is also picking up momentum. Immediate focus is now on 32.30 resistance in Silver. Firm break there should confirm that corrective fall from 34.84 has completed with three waves down to 28.74. While it may be early to confirm larger up trend resumption, in this case, further rally should at least be seen to retest 34.84 high.

    US PCE inflation rises to 2.6% in Dec, core PCE unchanged at 2.8%

    In December in the US, headline PCE price index rose 0.3% mom while core PCE price index rose 0.2% mom, both matched expectations.

    In the 12-month period, PCE price index accelerated from 2.4% yoy to 2.6% yoy. Core PCE price index (Excluding food and energy) was unchanged at 2.8% yoy. Both matched expectations.

    Personal income rose 0.4% mom or USD 92.0B, matched expectations. Personal spending rose 0.7% mom or USD 133.6B, stronger than expected 0.5% mom.

    Canada’s GDP contracts -0.2% mom in Nov, but Dec outlook improves

    Canada’s economy shrank by -0.2% mom in November, marking the largest contraction since December 2023 and coming in weaker than expectations of -0.1% mom decline. The downturn was broad-based, with 13 of 20 sectors reporting declines, underscoring underlying weakness across multiple industries.

    Goods-producing industries led the slowdown, contracting by -0.6% after a strong 0.9% expansion in October. Services sector, which had posted steady gains in previous months, also slipped by -0.1%, marking its first decline in six months.

    Advance estimates suggest that real GDP expanded by 0.2% mom in December, pointing to a rebound. Growth was driven by gains in retail trade, manufacturing, and construction, though this was partially offset by weakness in transportation, real estate, and wholesale trade.

    Tokyo inflation accelerates, keeping BoJ hikes alive

    Japan’s inflationary pressures picked up in January, with Tokyo’s core CPI (excluding fresh food) rising to 2.5% yoy from 2.4%, marking its fastest pace in nearly a year. Core-core measure (excluding food and energy) also edged higher to 1.9% from 1.8%. Meanwhile, headline CPI surged to 3.4% from 3.0%, its highest level in nearly two years, largely driven by rising prices for vegetables and rice.

    The data reinforces expectations that inflation in Japan could continue rising toward 3% in the coming months, as persistently weak yen drives up import costs. Some analysts see room for one or two more rate hikes by BoJ this year, particularly if inflation remains sticky and real wage growth improves. However, with Tokyo services inflation slowing to 0.6% yoy from 1.0% yoy, concerns remain about the sustainability of domestic price pressures.

    On the production side, industrial output rose 0.3% mom in December, matching forecasts. The Ministry of Economy retained its cautious assessment, stating that production “fluctuates indecisively,” though manufacturers expect a 1.0% rise in January and a further 1.2% increase in February.

    Retail sales, however, showed resilience, climbing 3.7% yoy, exceeding expectations of 2.9%. This suggests that consumer demand remains strong despite higher living costs.

    BoJ’s Ueda reaffirms support for economy while keeping rate hikes on the table

    BoJ Governor Kazuo Ueda reiterated the central bank’s is aiming for “gradual pickup” in prices, supported by a “solid increase in wages.” He emphasized that maintaining easy monetary conditions remains necessary to “support economic activity” and ensure that underlying inflation continues rising toward the 2% target.

    However, he also made it clear that BoJ’s stance remains unchanged, noting that it will “continue raising interest rates” and adjust monetary support if the economy and prices “move in line with our forecasts.”

    At the same parliamentary session, Prime Minister Shigeru reinforced the government’s priority of achieving sustainable inflation alongside wage growth. He highlighted that while stable price increases are important, “we must aim for wage growth higher than inflation while prices rise stably.” He also warned against the perception that falling prices are beneficial, arguing that such views prolonged Japan’s deflationary struggles in the past.

    USD/CHF Mid-Day Outlook

    Daily Pivots: (S1) 0.9069; (P) 0.9087; (R1) 0.9114; More…

    Intraday bias in USD/CHF stays mildly on the upside for the moment. Correction from 0.9200 could have completed at 0.8964 already. Further rise should be seen to retest 0.9200 and then 0.9223 key resistance. On the downside, below 0.9058 minor support will turn intraday bias neutral first. Further break of 0.8964 will resume the fall from 0.9200 to 38.2% retracement of 0.8374 to 0.9200 at 0.8884 next.

    In the bigger picture, as long as 0.9223 resistance holds, price actions from 0.8332 (2023 low) are seen as a medium term corrective pattern. That is, long term down trend is in favor to resume through 0.8332 at a later stage. However, sustained break of 0.9223 will be an important sign of bullish trend reversal.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:30 JPY Tokyo CPI Y/Y Jan 3.40% 3.00%
    23:30 JPY Tokyo CPI Core Y/Y Jan 2.50% 2.50% 2.40%
    23:30 JPY Tokyo CPI Core-Core Y/Y Jan 1.90% 1.80%
    23:30 JPY Unemployment Rate Dec 2.40% 2.50% 2.50%
    23:50 JPY Industrial Production M/M Dec P 0.30% 0.30% -2.20%
    23:50 JPY Retail Trade Y/Y Dec 3.70% 2.90% 2.80%
    00:30 AUD PPI Q/Q Q4 0.80% 0.90% 1.00%
    00:30 AUD PPI Y/Y Q4 3.70% 3.90%
    05:00 JPY Housing Starts Y/Y Dec -2.50% -3.40% -1.80%
    07:00 EUR Germany Retail Sales M/M Dec -1.60% -0.20% -0.60% 0.00%
    07:30 CHF Real Retail Sales Y/Y Dec 2.60% 0.60% 0.80% 1.40%
    08:55 EUR Germany Unemployment Change Dec 11K 14K 10K
    08:55 EUR Germany Unemployment Rate Dec 6.20% 6.20% 6.10%
    13:00 EUR Germany CPI M/M Jan P -0.20% 0.10% 0.50%
    13:00 EUR Germany CPI Y/Y Jan P 2.30% 2.60% 2.60%
    13:30 CAD GDP M/M Nov -0.20% -0.10% 0.30%
    13:30 USD Personal Income M/M Dec 0.40% 0.40% 0.30%
    13:30 USD Personal Spending M/M Dec 0.70% 0.50% 0.40% 0.60%
    13:30 USD PCE Price Index M/M Dec 0.30% 0.30% 0.10%
    13:30 USD PCE Price Index Y/Y Dec 2.60% 2.60% 2.40%
    13:30 USD Core PCE Price Index M/M Dec 0.20% 0.20% 0.10%
    13:30 USD Core PCE Price Index Y/Y Dec 2.80% 2.80% 2.80%
    13:30 USD Employment Cost Index Q4 0.90% 1.00% 0.80%
    14:45 USD Chicago PMI Jan 39.9 36.9

     



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  • Dollar Softness Continues as Forex Markets Tread Calm Waters

    Dollar Softness Continues as Forex Markets Tread Calm Waters


    The forex markets remain unusually quiet today, with Dollar staying soft despite multiple attempts to rebound. The greenback has only managed meaningful gains against the weaker Yen and the struggling Canadian Dollar, while failing to build momentum against other major currencies. With little in the way of significant economic data on the calendar today, trading is expected to remain subdued. However, volatility could resurface, probably just temporarily, later in the week, with BoJ’s anticipated rate hike and key PMI releases from major economies slated for Friday.

    Loonie, nonetheless, could see movement today, with retail sales data due. BoC is widely expected to cut rates by 25 bps at its upcoming meeting next Wednesday, a view supported by a Reuters survey where 25 out of 31 economists forecast such a move. Additionally, median expectations point to another 25 bps cut in March, followed by a further reduction later in the year, bringing the overnight rate to 2.50%.

    For USD/CAD, however, the real driver for a decisive range breakout, beyond brief jitters, would lie in developments surrounding US-Canada trade relations. The market awaits details of tariffs expected to be announced on February 1, including their scope and which products will be affected.

    So far this week, Yen has been the weakest performer, followed by Dollar and Loonie. At the other end of the spectrum, the Kiwi remains the strongest, while Euro and Aussie. Sterling and Swiss are still stuck in middle positions.

    A key development this week has been the sharp decline in USD/CNH, which is viewed as a sign of a stabilizing risk sentiment toward global trade. Technically, a short term top should be formed at 7.3694, just ahead of 7.3745 key resistance (2022 high). More consolidative is expected in the near term with risk of deeper pull back. But downside should be contained by 38.2% retracement of 6.9709 to 7.3694 at 7.2172. Eventual upside break remains in favor.

    Gold surges on Dollar weakness, Silver lags

    Gold prices surged past 2750 mark this week, supported largely by a weaker Dollar. The overall market sentiment is on a relatively calmer backdrop, with US President Donald Trump’s decision to delay tariff implementations contributed to easing trade-related fears. Additionally, geopolitical tensions receded as a ceasefire between Israel and Hamas took hold earlier in the week.

    Hence, as whether Gold can break its record high of 2789 will depend largely on the depth of Dollar’s correction in the coming days.

    Technically, Gold’s rebound from 2536.67 is currently seen as the second leg of the corrective pattern from 2789.92 high. Strong resistance could be seen from this resistance to limit upside. Break of 2689.21 support will argue that the third leg of the pattern has started back towards 2536.67 support. Nevertheless, decisive break of 2789.92 will confirm up trend resumption.

    Silver’s performance, by comparison, has been relatively subdued. Its recovery from 28.74 remains weak and corrective in nature. For now, as long as 32.30 resistance holds, fall from 34.84 is still in favor to resume at a later stage, to 26.44 cluster support zone.

    Japan posts first trade surplus in six months

    Japan recorded a trade surplus of JPY 130.9B in December, the first surplus in six months, driven by a 2.8% yoy rise in exports to JPY 9.91T. Imports also jumped, rising 1.8% yoy to JPY 9.8T.

    However, exports to the two largest trading partners saw declines, with shipments to China falling by -3.0% yoy and to the US by 2.1% yoy.

    On a month-on-month seasonally adjusted basis, exports rose 6.3% mom to JPY 9.44T. Imports increased 2.2% mom to JPY 9.47T, resulting in a seasonally adjusted trade deficit of JPY 33B.

    For the entirety of 2024, Japan’s trade deficit narrowed significantly, shrinking by 44% from the previous year to JPY -5.33T. Exports reached a record high of JPY 107.09T, up 6.2%, bolstered by strong demand for vehicles and semiconductor-related products. Imports also rose by 1.8% to JPY 112.42T.

    USD/CAD Daily Outlook

    Daily Pivots: (S1) 1.4322; (P) 1.4357; (R1) 1.4412; More…

    Range trading continues in USD/CAD and intraday bias remains neutral. Further rise is expected as long as 1.4260 support holds. Break of 1.4516 will resume larger up trend to 1.4667/89 key resistance zone. Nevertheless, firm break of 1.4260 will turn bias to the downside for deeper pullback to 55 D EMA (now at 1.4205) and below.

    In the bigger picture, up trend from 1.2005 (2021) is in progress for retesting 1.4667/89 key resistance zone (2020/2015 highs). Decisive break there will confirm long term up trend resumption. Next target is 100% projection of 1.2401 to 1.3976 from 1.3418 at 1.4993. Medium term outlook will remain bullish as long as 1.3976 resistance turned holds (2022 high), even in case of deep pullback.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:50 JPY Trade Balance (JPY) Dec -0.03T -0.64T -0.38T -0.39T
    13:30 USD Initial Jobless Claims (Jan 17) 220K 217K
    13:30 CAD Retail Sales M/M Nov 0.20% 0.60%
    13:30 CAD Retail Sales ex Autos M/M Nov 0.10% 0.10%
    15:00 EUR Eurozone Consumer Confidence Jan P -14 -15
    15:30 USD Natural Gas Storage -270B -258B
    16:00 USD Crude Oil Inventories -0.1M -2.0M

     



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