Silver Prices Dip to $30.60 Amid Strong Dollar and Rising Yields

Leveraged silver contracts on coinbase went live today, each contracts represents 50oz of silver.
They are 24hour tradable. 24 hour 7 says a week trading in silver 🙌 lets break the comex over the weekend people 😉

— Just Some Guy (@datruthhuts) November 12, 2024

The strengthening US Dollar Index (DXY), currently near a four-month high of 105.70, highlights the dollar’s appeal. Rising US Treasury yields further support this trend, with 2-year and 10-year bond yields at 4.28% and 4.32%, respectively. These factors make dollar-denominated silver more expensive for international buyers, adding to the metal’s current challenges.

Trump’s Fiscal Policies Could Affect Silver’s Outlook

Trump’s anticipated fiscal policies, which could include tariffs and tax reforms, are fueling speculation about future inflation rates. Higher inflation would typically benefit silver as a hedge. However, if inflationary pressures lead the Federal Reserve to delay any planned rate cuts, silver prices may remain under pressure due to a persistently strong dollar. The potential for tariffs, especially on imports from China, could also disrupt the global industrial metals market, impacting silver demand, which has significant industrial applications.

China, the world’s largest manufacturing hub, has taken steps to stimulate its economy with a 10 trillion Yuan debt package aimed at supporting local governments. However, this package fell short of expectations as it did not include direct stimulus measures, which investors had anticipated. Chinese-owned solar panel manufacturers have also scaled back production, partly due to concerns over potential US tariffs under Trump’s administration, as noted by analysts at Morgan Stanley. This reduction in industrial demand further weighs on silver prices.

https://twitter.com/Jennie_XAUUSD/status/1856195150873293285

Technical Outlook: Silver Faces Key Resistance Amid Bearish Trend

From a technical perspective, silver remains under bearish pressure, trading near $30.55. The pivot point is positioned at $30.80, while immediate resistance stands at $31.10, with stronger barriers at $31.40 and $32.07. Key support levels are at $30.37, $30.05, and $29.78.

Silver’s Relative Strength Index (RSI) at 36 indicates an oversold condition, which may suggest a potential short-term recovery. However, the 50-day Exponential Moving Average (EMA) at $31.39 continues to act as a resistance level, underscoring the bearish trend.

Key Insights

• Stronger Dollar Pressure: A rising dollar, supported by higher Treasury yields, reduces silver’s appeal to international buyers.

• Industrial Demand Concerns: China’s limited stimulus measures and potential US tariffs could dampen industrial silver demand.

• Bearish Technical Indicators: Oversold RSI levels may indicate a possible rebound, but the 50-day EMA remains a strong resistance.

Conclusion: Silver’s price remains subdued due to a combination of dollar strength, higher Treasury yields, and uncertain industrial demand. While technical indicators suggest the possibility of a short-term rebound, a break above $31.10 is necessary to confirm a reversal. Investors are advised to monitor dollar movements and geopolitical developments for further insights into silver’s potential direction.