Silver bulls showing their hand above $25 in early Asia on USD weakness
|- XAG/USD firmly bid as the week gets going, with all eyes now turning to the Fed.
- Real rates have continued their grind lower, but retail trades could be the weak link in the bull's chain.
The price of silver shot higher in late North America and extended the gains when the market opened again in early Asian trade.
Silver is currently 1.95% higher at the time of writing, shooting up from an opening low of 24.4860 to a session high so far of 25.1052 vs the US dollar.
Risk appetite gradually improved from European to US trade, that did not prevent precious metals from extending their gains to, seeing gold make all-time highs.
Silver trades sharply higher towards levels not seen since 2013.
The dollar fell against all major currencies as markets look ahead to the FOMC while dovish policy expectations have boosted risk appetite more broadly.
Beneath the surface, however, we see evidence that trading behaviour has diverged from its recent past, analysts at TD Securities have argued.
Meanwhile, while real rates have continued their grind lower, the rally in gold prices has sharply overshot the decline in real rates over the past few trading sessions. Further, it appears that one cohort's behavior in particular may have contributed — retail traders. Specifically, the evidence suggests that a surge in retail interest may be helping silver outperform.
All eyes on the Fed
Investors are now looking ahead to the Fed this week.
Expectations are growing that they will be even more dovish than recently, keeping policy accommodative that has been pushing demand even higher.
For precious metals bulls, the risk at this week's FOMC relates to the duration adjustment required as auction sizes are set to significantly increase, which could generate a supply-demand mismatch and pressure long end rates should they keep the composition unchanged.,
the analysts at TD Securities explained.
Silver levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.