Silver Price Analysis: XAG/USD jumps to six-month high on short-squeeze chatters
- Silver began February with an upside gap to the highest since September 2020.
- Risks remain heavy amid fears of further restrictions on equity trading, EU-UK tussle.
- Short-squeeze plans circulate on social media platforms, portraying another trader-frenzy thing.
- PMIs, risk news keep the driver’s seat, US dollar moves shouldn’t be missed.
Silver bulls attack $29.00, currently up 6.60% near $28.97, during the early Asian trading on Monday. The white metal marked the upside gap from $26.98 to $28.88 at the start of February’s trading.
Market chatters matter the most..
Market chatters concerning the silver's next move keeps it on the top of the bulls' radar. It should be noted that the weekend chatters suggesting a short-squeeze in silver to the $1,000 level could be cited as the main fuel behind the move. "Robert Higgins, chief executive officer at Argent Asset Group LLC in Wilmington, Delaware, said he’s been on the phone trading all day, with people desperate to buy gold or silver" said Bloomberg.
With the latest retail traders’ frenzy, portrayed by wild moves in Gamestop and the likes, global policymakers eye further restrictions, which in turn weigh on market risks off-late. In a recent move, US House Majority Leader Chuck Schumer tweeted, “We cannot have a stock market where players are also refs. The Securities and Exchange Commission (SEC) and Congressional investigations of decisions to restrict access to trade GameStop must happen ASAP.” Even so, chatters that Robinhood narrows trading restrictions to eight companies from 50 suggest market players always find room to trade.
Elsewhere, the recent easing in the coronavirus (COVID-19) numbers in the developed world combat with a fresh five-day lockdown in Australia’s Perth, following a fresh case in hotel staff. On the same line, the UK’s record vaccinations battle the Brussels-London jitters over the vaccines.
It should be noted that the latest weakening of China’s official PMIs and a light calendar in Asia also heavy the risks. That said, S&P 500 Futures drop 0.67% to 3,671 by press time.
Moving on, China’s Caixin Manufacturing PMI for January, expected 52.7 versus 53.0 prior, will decorate the calendar. Though, the risk news concerning further equity restrictions and vaccine updates can keep the driver’s seat.
Technical analysis
Unless declining back below September’s high near $28.90, silver buyers can keep the August 2020 peak surrounding $29.85 on the radar.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
