Silver price is on track for its first weekly decline in three weeks as investors’ worries of weak demand persist. The metal’s price is up by 0.40% and is trading at $24.42, which is slightly higher than yesterday’s low of $23.50.
There are four things moving the price of silver today. First, the metal is reacting to the overall weak US dollar. The dollar index, the closely-watched gauge that measures the strength of the greenback, has fallen by 0.10% today. It is trading at $93.77 after it soared by more than 0.35% yesterday. Silver and the greenback tend to have an inverse relationship.
Second, silver price is reacting to the overall upbeat stock market, especially in Europe. In Germany, the DAX index has soared by more than 0.45% while the FTSE 100 has gained by 0.80%. In the United States, the S&P 500 and Nasdaq 100 are also in the green. In most cases, the price of silver and other commodities tends to rise in unison with global stocks.
Third, XAGUSD is rising as traders wait for the industrial production data from the United States. The numbers will be released by the Federal Reserve at 13:15 GMT today. Analysts expect the data to show that production rose by 0.5% in September. That will be a small increase from the August’s increase of 0.4%. These numbers are important for silver because, unlike gold, it is a highly industrial metal.
Finally, silver prices are also watching the upcoming US retail sales numbers that will come out at 12:30 GMT. Analysts polled by Reuters expect the data to show that sales rose by just 0.7% in September. Better retail sales numbers will be a sign of more demand.
Silver price technical analysis
The daily chart shows that the silver price has been rising after it reached a low of $21.60. The pair has formed an ascending channel that is shown in pink. It is also along the 25-day and 15-day exponential moving averages. It is also approaching the 23.6% Fibonacci retracement level at $25.62.
For today, I suspect that the pair will remain in this consolidation range. However, in the coming days, I expect that the price will continue falling as bears aim for the September low of $21.60.
Silver technical chart