Silver is a metal that is primarily used for manufacturing and less as a precious metal. It is used in high-technological processes thanks to its high conductivity, in manufacturing solar cell batteries and electric vehicles.
So, the demand and the price of silver is directly linked to the business activity worldwide. The latter is highly dependent on the spread of Delta variant and the Federal Reserve’s (Fed) stimulus measures perspectives. Such attributes distinguished silver price movements at the beginning of this week. After a weak Non-Farm Payrolls report in the United States last Friday, the chances of earlier tapering of the bond buying program by the Fed have seen to decrease. The U.S. Dollar index stepped back to 91.8 points enabling silver prices to touch the $25 per ounce strong resistance, which is also a forceful physiological level. However, this Monday and Tuesday silver prices rolled back to $24.30 per ounce amidst the lack of new upside drivers and a recovering Greenback.
For the moment, silver prices are at fragile equilibrium levels that may be retained by the end of this week. Market sentiment may create more uncertainty and therefore may push prices sideways. No new significant data or events are expected to generate any directional movement. So, silver prices may be expected to swing within a narrow range of $23.8-$25.1 per ounce.
But, a mid-term perspective fo silver may sound much better. Silver prices this summer tumbled from $29 per ounce to $21 amid fears of the further spread of the Delta variant. So, prices became quite attractive at this new level. As it may seem that the pandemic may fade in the coming months, prices may rise following the increase in demand for it. So, it is may be worth considering buy positions at the support level of $24-24.5 per ounce with the first target at $$26-27 per ounce. If prices go higher, a resistance at $28-29 per ounce may be reached.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
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