Silver prices are trading modestly lower on the day as risk sentiment improves slightly in the market from events on the US-China trade front. Chinese news outlet Global Times is citing Chinese experts knowledgeable about the situation as saying that the US and China are inching closer to finally inking a phase 1 deal.
One of the experts cited in the report is Gao Lingyun, who is with the Beijing-based Chinese Academy of Social Sciences. He was reported as having told the Global Times that a broad consensus for a Phase 1 agreement had been reached by both sides. The news sources further went on to say that Lingyun’s views align with the Chinese side’s stance on wanting a Phase 1 deal that is balanced and fair to both sides.
Apart from President Trump’s comments on Friday that said both sides were “potentially very close” to getting a deal, no further details on some of the unresolved issues (such as the tariff rollbacks) were disclosed by the Global Times.
Silver is slightly lower on the day, but XAGUSD continues to trade within the context of a bullish flag pattern. Today’s downward move is now testing the lower border of the consolidation flag component of the pattern.
A breakdown of the flag is the expected resolution of the bearish flag pattern. If this was to occur, the initial target could be the 16.588 price level (previous high of July 19 and previous low of August 13). A push below this price level would then target 16.157, which is where three previous highs (Jan 30, Feb 20 and 27) as well as two previous lows (July 22 and August 5) are located. This price level also matches the measured move of the flag’s breakdown, using the “pole” (price candles from Nov 4 to 11) as the reference distance.
On the flip side, a recovery will see silver continuing to trade within the flag consolidation area. A push above the upper border invalidates the expected breakdown, and targets 17.48 as the initial price target (Aug 12 high). Further upside push could target 18.105 where a cluster of highs occurred on October 30 to November 4.More content