Current trend

The XAG/USD pair, having renewed the 12-year high of 34.86 last week, is correcting to 33.70 and may grow to 35.50.

The dynamics are determined by the investor sentiment regarding the metals market in general, as well as expectations of the victory of the Republican candidate Donald Trump in the US presidential election. Traders believe that, in this case, the national economy will accelerate due to the reforms proposed by Trump. However, there are concerns about the development of inflation due to such reforms to compensate for which market participants are considering smaller assets such as gold, silver, and the American dollar as investment objects, as a result of which the asset has already added 45.0% this year.

The correction in the silver contracts market continues. According to the report of the US Commodity Futures Trading Commission (CFTC), last week, net speculative positions increased from 54.0K to 66.4K. In dynamics, the advantage of the “bulls” increased against the influx of investors. According to the data on positions secured by real money, their balance is 56.726K against 9.366K for the “bears.” Last week, buyers opened 8.669K contracts, while sellers closed 3.160K transactions.

The long-term trend is upward. In mid-October, the price broke the resistance level of 32.50, renewed the May high, and reached the resistance level of 34.20. After consolidation above, the next target will be the area of ​​35.50 and 37.50 (the high of 2012). If the quotes reach the support level of 32.40 within the correction, a decline to ​​34.20 and 30.40 may follow. The RSI indicator (14) is not in the overbought zone, which indicates the continuation of positive dynamics.

The medium-term trend is upward. Last week, the asset rose to zone 4 (35.13–34.91) and began a correction. Within it, it can reach the trend support area of ​​32.46–32.22, where a reversal, with the target at the October high of 34.85 is likely. Otherwise, the trend will change downwards, and short positions with the target in zone 2 (30.06–29.82) are relevant.

Support and resistance

Resistance levels: 34.20, 35.50, 37.50.

Support levels: 32.40, 30.40, 27.83.

Trading tips

Long positions may be opened from 32.40, with the target at 34.20 and stop loss 31.80. Implementation period: 9–12 days.

Short positions may be opened below 31.80, with the target at 30.40 and stop loss 32.40.