Silver sees choppy trading conditions around midpoint of $25.00-$26.00ish range

• Spot silver prices have seen indecisive/choppy trade on Monday.
• The precious metal trades close to flat on the day just under the $25.50 mark
• Indecisiveness in silver and other precious metals is indicative of a mixed feel to market sentiment.

Spot silver prices (XAG/USD) have seen indecisive/choppy trade on Monday, swinging between the $25.40 and $25.80 mark since the reopen. As things stand right now, the precious metal trades close to flat on the day just under the $25.50 mark, with spot prices roughly in the middle of last week’s $25.00ish to $26.00ish range.

XAG has been under pressure in recent trade amid a rise in the US dollar on a cautious tone to risk appetite. US real yields have been dropping in recent trade also, however, which is likely to stop any sell-off from getting too deep.

Mixed markets as near-term Covid-19 concerns battle long-term optimism

Indecisiveness in silver and other precious metals is indicative of a mixed feel to market sentiment. The Nasdaq 100 index is trading up well over 1.0% ahead of a key week of earnings, the S&P 500 is up just 0.3% and the Dow trades lower by 0.5%, the latter two dragged by a drop in Merck’s share price after the company axed its Covid-19 vaccination programme following poor results.

Negative Covid-19 news is also weighing on European stocks; France is mulling a tighter lockdown within days, the EU faces further vaccine delays (this time from AstraZeneca, after Pfizer announced delays a few days earlier), the UK strain that is spreading in the continent is now thought to be around 30% deadlier than the original strain and German IFO numbers for January, released in the early part of the European session, were very downbeat.

Though the above noted bad news is weighing most heavily on European assets (EUR is underperforming alongside European equities), it is also contributing to a cautious feel in other asset classes; crude oil markets are lower, US and European bond yields are lower, copper is lower and the US dollar is higher.

Expectations that US President Joe Biden will issue sweeping travel bans in order to keep Covid-19 variants out (UK PM Boris Johnson is likely to do the same) is not helping risk appetite either, nor are reports that Moderna’s vaccine might be less effective against the South Africa variant.

But in FX markets, risk-sensitive NZD, AUD and CAD remain underpinned. This, alongside strength in US stock markets, shows that despite all the negative Covid-19 headlines over the weekend, there is still some optimism in the market, most likely on the same old themes (fiscal stimulus/recovery hopes and dovish central bank expectations).

Spot silver key levels