Retracement Doesn't Alter Bullish Trend

Summary:

Silver is experiencing short-term corrections, yet bullish trends persist, offering favorable opportunities for buying dips.

BUY XAGUSD

Close Time

CLOSED

32.400

Entry Price

35.300

31.200

84.599 +6.117 +7.79%

120.0

Pips

Loss

31.200

Exit Price

32.400

Entry Price

35.300

Fundamentals

Recently, silver surged to its highest level in twelve years at $34.88, spurred by heightened Middle East geopolitical tensions, prospects of central bank rate cuts, and political uncertainties surrounding the U.S. election. However, it then retraced course. With increased odds of Trump being re-elected, whose tariff policies might stoke inflation, coupled with robust U.S. job data dampening expectations of significant Fed rate cuts, the U.S. dollar and Treasury yields rebounded, entangling silver in consolidation. Concurrently, progress in ceasefire talks between Israel and Hezbollah undermined safe-haven sentiments, triggering declines in gold and silver, partly due to profit-taking by long-position holders.

Nonetheless, the fundamental drivers underpinning precious metals' ascent remain intact. Central banks globally are entering easing cycles and sustained gold purchasing trends support gold's further rise, potentially uplifting silver. Moreover, silver, a critical metal in the transition to renewable energy, sees growing industrial demand, positioning it as a potential hot commodity following gold.

Technical Analysis

Retracement Doesn't Alter Bullish Trend_1

Regarding the 4H chart, XAGUSD breached key resistance at $33.0, surging towards the $35.0 threshold before retracing and forming a double-top structure, amplifying near-term volatility. Thus, further retracements may emerge. Yet, the prior breakout indicates silver's entry into a new bullish phase, where dips could lure buyers back in. The previous peak around $32.3 may act as a crucial support level, signaling buying-at-lows opportunities as the price stabilizes post-correction.

As silver experienced rapid decline and showed signs of being oversold, investors should not sell it anymore. It is recommended to buy when silver reaches 32.3 and set the target at 35.5. The stop-loss should be set at 31.3.

Trading Recommendations

Trading direction: Buy

Entry price: 32.4

Target price: 35.3

Stop loss: 31.2

Support: 32.3/32.5

Resistance: 35.3/34.5

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