Often considered the ‘poor relation’ of gold as a safe haven stock, the silver spot price (XAGUSD) has shone of its own accord recently.
The XAGUSD spot price is up almost 4% today so far, at around 3.8%, to over $30.80 per troy ounce.
In fact, silver’s price is up by more than 31% this year to date and over 16% in the past month.
This is even more of a rally than the gold spot price (XAUUSD), which has so far increased somewhere in the region of 13.5% this year to date, and less than 1% in the past month, at the time of this article’s writing.
The silver bullet
Silver hit a multi-year high on May 20th, reaching $32.50 per ounce. Silver has been weaker since then but, as analyst David Morrisson of Trade Nation says:
It has pulled back since then. The area just below $30 has acted as significant resistance previously, so it seems reasonable to assume that it is acting as a support now. The question is whether there’s more downside to come. But as ever, strong rallies can appear out of nowhere, particularly after significant pullbacks.”
Our analyst’s opinion of the silver price
According to Invezz analyst Ritesh A, May has been the moment for the world’s two biggest precious metals:
Both silver and gold have experienced a remarkable surge this month. It’s uncommon for precious metals like gold and silver to rise alongside the S&P 500, given their usual negative correlation, but May has been an exception.”
Ritesh adds that “silver, historically more volatile than gold, is expected to continue this upward trend. The medium- and long-term charts continue to show bullish momentum. As long as COMEX silver futures trade above the 61.8% Fibonacci retracement level from the recent swing low and high, at $21.850, the upward momentum should persist. For a fresh upmove, though, silver futures need to break above $32.455, which is currently acting as a near-term resistance.”
The gold price
The XAUUSD spot price has had a similar trajectory to silver recently, if a little less dramatic in its rise. As Ritesh A. says:
“Gold has also shown upward momentum similar to silver. However, it has been rangebound between $2,300 and $2,440 for over a month now. For a long-term position in either direction, gold futures need to break out of this range. In the short term, traders can capitalize on this range by buying gold futures at the lower end and shorting at the higher end.”
Why have the silver and gold prices risen?
Gold and, to a lesser extent, silver are both considered ‘safe haven’ assets. And much of the current uptick in both metals’ prices can be attributed to the fact that geopolitical tensions have continued to escalate in the Middle East between Israel, Palestine and even some tensions within Iran.
These rises in the precious metals’ pricing were only elevated by a recently weaker US dollar after a disappointing US jobs report last week.
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