Technical analysis of silver

Silver has surrendered key technical and psychological levels after falling below the $50-per-ounce mark. It has also lost the technical support level near $49.50, which had previously acted as a historical resistance level.

Moving to lower timeframes, we can see that the downward trend is dominating price action, with the following key points to consider:

  1. Silver is currently trading within a range between a resistance zone near $51.30 and a support zone around $48.70. A break above or below either of these levels could provide further direction for the next price move.
  2. On the 4-hour timeframe, silver remains under downward pressure, reinforced by the 100-period moving average.
  3. Silver declined by more than 18% in October, bringing its losses since the beginning of the year to 31.7%.

In conclusion, we will be watching whether silver manages to break above the $51.30 level or falls below the $48.70 support level.

XAGUSD. Time: monthly, Tools: SMA 100XAGUSD. Time: monthly, Tools: SMA 100

Fundamental analysis of silver

Geopolitical tensions and their potentially negative impact on energy prices, alongside technology companies' earnings results, are factors weighing on silver price movements. In addition, the US midterm elections could also influence market sentiment.

The following are the key factors to monitor, as they are expected to affect price movements:

  1. Rising inflation and its potential impact on the likelihood of monetary policy tightening resuming at the upcoming December meeting.
  2. Monitoring war-related risks and oil supply flows from the Middle East.
  3. Monitoring long-term government bond yields, particularly amid growing expectations of another interest rate hike in December.

Silver is a highly volatile financial asset. We will therefore follow the technical trading principle that the prevailing trend remains in place until there is clear evidence of a reversal.