Silver price (XAGUSD) is rising today as the market remains optimistic about stimulus, the upcoming US election, and the weaker US dollar. The metal’s price is trading at $25.12, which is 0.60% higher than its close yesterday. Other metals, including gold and copper are also gaining today.
The price of silver is gaining because of three key reasons. First, recent polling data from the United States shows that Joe Biden is leading the incumbent in both national and in battleground states. The former vice president is also leading in terms of fundraising, by far. As I have written before, a Biden victory will be a positive thing for silver prices because of his pledge to transition the US to green energy. This will lead to more demand for the metal because of its uses in the manufacture of solar panels.
Second, the US dollar has been relatively weak recently. The dollar index, which measures its performance against key peers is down by more than 0.30% and is trading at the lowest level in more than a month.
It is down by 0.30% against the euro, 0.70% against the British pound, and by 0.10% against the Canadian dollar, among others.
A weaker dollar is a positive thing for silver prices. That is because silver is usually traded in dollars, meaning that buyers can buy more of it when the greenback is lower.
Third, investors are hopeful that the White House and congress will reach a stimulus deal before the election. In a statement yesterday, the White House chief of staff said that he was hopeful that the two sides would reach a deal in the near term. However, in reality, there are significant differences, which make a deal relatively impossible before the election.
Finally, silver price is rising because of the recent economic numbers from China. According to the country’s statistics office, the economy expanded by 4.2% in the third quarter. And, analysts expect that this recovery will continue in the final quarter. This is an important thing because it is a sign that demand will increase.
Silver price technical analysis
On the four-hour chart, we see that silver price has been on a slow upward trend since September, when it fell to a low of $21.67. The price has moved above the 25-day exponential moving averages. Notably, it has remained between the first and second support levels of the Andrews pitchfork tool. It is also approaching the 23.6% Fibonacci retracement level.
Therefore, I expect that the price will continue rising as bulls attempt to retest the year-to-date high of $29.95. However, a move below the support of $21.67 will mean that there are more bears in the market.