Silver Crashes To Support

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Silver Crashes To Support

Silver (Xag/Usd) Crashes To $29.00

During Friday's session, a major development was seen in the Silver (XAG/USD) as it nosedives to around $29.00. Overall, the white metal is under intense selling pressure as the outcome of the 3rd plenum meeting in China was a major disappointment.

At the 3rd plenum meeting, several stimulus measures were announced, but they were not enough to properly address the economic challenges. Additionally, these measures were mostly focused on high-quality development.

China Announces Sluggish Stimulus Measures

For the last few weeks, Silver traders have been looking forward to these stimulus measures. However, the measures announced by China were not enough & this was not received well by the Silver traders.

Ever since China opened up its economy post-COVID, the country has continued to struggle with economic growth momentum. The reason for this week is weak demand from the overseas and even domestic markets.

With no strong fiscal package to boost the Chinese industrial output, Silver prices are under pressure & are now trading near the $29.00 handle.

Silver applications are widespread and include EVs, consumer durables, medical equipment, and so on. However, weak domestic and overseas demand means less consumption of silver.

Meanwhile, the US Dollar is in high spirits as the chances of a Trump victory have increased tremendously in the last few weeks. The DXY is seen trading around 104.30 after staging a recovery from 103.65 (four-month lows).

However, we also can't ignore the forecast of a rate cut at the September meeting, as the chances are already above 90%. If this rate cut is materialized, it will provide a much-needed boost to the Silver prices.

Technical analysis of the Silver (XAG/USD) shows that it has closed in red for the 3rd consecutive session. The recent weakness has come after the white metal's breakdown below a bullish trendline.

Silver (XAG/USD) has already dropped below the 50 and the 20 EMA, which were present near $29.66 and $30.20, respectively.

Any more selling in the white metal will expose the $25.90 handle, the high from the 4th of December, which is now serving as a support.

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