- Spot silver (XAG/USD) prices have seen further downside on Monday, but are holding above the psychological $22.00 level for now.
- From a technical perspective, XAG/USD maintains its downside bias and is currently trading within a bearish trend channel.
Another day of downside for spot silver (XAG/USD). The precious metal is looking likely to close in the red for the eighth time in the last ten trading days on Monday, with spot prices currently nearly 2% lower on the day, or trading with losses of over 40 cents. Still, silver has managed to keep its head above $22.00, with prices having very briefly dipped under this level earlier on in the session only to recover back above it strongly.
USD weakness providing little favour to precious metals
USD has been choppy on Monday, trading weaker for most of the session, only to significantly strengthen into the 16:00GMT London Fix and recoup all of the days losses and some. USD’s negative bias in the early part of Monday's session did not come to the aid of precious metal markets at all and although off lows, spot gold still trades lower by around 0.4%, as well as losses of nearly 1% in spot silver.
Month-end flows could be one factor exacerbating Monday’s losses; a number of analysts point out that asset managers and big players have been gradually adjusting their portfolios throughout the month to better reflect the global growth rebound story in 2021. Naturally, such adjustments have not favoured precious metals particularly well.
Silver’s downside bias intact, bears target September lows
Having broken to the downside of a long-term pennant formed since August at the end of last week, Silver’s immediate technical bias remains to the downside. XAG/USD has already broken to the downside of the October low around $22.50 and has already tested the psychological $22.00 level. Should this level be next to go, September’s $21.68 low would be the next target.
Despite silver’s recent minor rebound from lows, its bias remains titled towards the downside from a technical perspective. Since roughly 16 November, the asset has moved to the south within a downwards trend channel linking 20, 23 and 27 November highs to the upside and the 16, 24 and 27 November lows to the downside. XAG/USD briefly broke below this trend channel on Monday but has recovered back inside it in recent trade. As long as the precious metal continues to respect this, a continued gradual move lower towards fresh multi-month lows is likely.
XAG/USD daily chart
XAG/USD one hour chart
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.