Silver to US Dollar
- By date
- Metadoro first
Silver prices have reached an important support zone of $20.50 per ounce forming a potential reversal sign. However, it is too early to consider it as such. The current price of $21.1 is essentially a test zone for an upward correction. The decline may be resumed after it hits the downside target of $19.84. On Friday, March 3, the price is testing the 200 EMA on the H1 chart. If we get a rollback down from this range on the H1 - H4 timeframes, then short trades with the target at $19.84 would be appropriate. These considerations are based on Fibonacci levels and the moving average of the RSI indicator with a period of 14. In addition, the market could stay at strong levels - both support and resistance - for several days or several weeks, as the case was in December last year.
Silver to US Dollar
- it is a precious metal and has the same drivers as gold. So, silver has a direct correlation with it, mostly following gold prices. Rising risks and uncertainty, high inflation and a threat of an economic slowdown are what drives silver prices up. So, a trader could use the CBOE Volatility Index (VIX) to monitor these fears and consider the direction of further price movements;
- Silver prices move in the opposite direction to the U.S. Dollar, as silver prices are measured in Dollars. Thus, economic data for the U.S. and the actions of the Federal Reserve have a strong effect on silver prices. For example, rising interest rates would have a negative impact on prices, as this would mean that the Dollar would strengthen, making Dollar-denominated assets more favourable compared to investments in precious metals;
- Silver is widely used as an industrial metal, outstripping gold in this sense. So, silver prices are driven by industrial demand and largely depend on the change of business activity in some sectors, like electronics, auto making, jewelry, batteries and solar panels, medical equipment, and more.
Silver prices are less volatile compared to gold, which provides nice trading opportunities for less experienced traders. Nonetheless, any trader should not forget about money management principles and risk control.
The largest producers of silver are Mexico, China, and Peru. So, the silver production situation should be monitored in these nations. For example, production of silver dropped dramatically during the pandemic and this boosted prices to the limit.
Silver doesn’t generate any income by itself compared to stocks or bonds. So, by investing in silver a trader should understand that he or she can make profit only on price difference. Additional income could be derived from investing in ETF’s on silver, or in stocks of silver producers like Fresnillo (FRES), Glencore (GLEN), Newmont Mining (NEM), and Pan American Silver (PAAS). They become more attractive as silver prices go up.
| Ticker | XAGUSD XAG/USD |
| Contract value | 5000 Tr.Oz. |
| Maximum leverage | 1:100 |
| Date | Short Swap (%) | Long Swap (%) | No data |
|---|
| Minimum transaction volume | 0.01 lot |
| Maximum transaction volume | 100 lots |
| Hedging margin | 50% |
| USD Exposure | Max Leverage Applied | Floating Margin |
|---|
