Silver 1 OZ 999 NY (XAG=X) Buy at First Support
Shayne Heffernan Trade Idea
“The silver market is small so it doesn’t take a lot of money to really push prices higher.” Shayne Heffernan PhD in Economics
Why This Matters
Rising demand for silver from investors will offset sharp falls in consumption by jewellers and industry and push prices towards $19 an ounce later in the year, an industry report said on Wednesday.
That would be a turnaround for prices, which tumbled to the lowest in a decade in March and at $15 an ounce are down nearly 20% so far this year.
Silver is seen by some as a safe haven asset akin to gold that is able to hold value over time – making it attractive to investors worried about fallout of the coronavirus crisis.
But because a little over half of silver is used in products such as electronics and solar panels it is also vulnerable to demand loss during economic slowdowns.
Bar and coin investors will add 215.8 million ounces to their stockpiles this year — the most since 2015 — after accumulating 186.1 million ounces in 2019, according to the Silver Institute’s World Silver Survey 2020.
Exchange-traded funds (ETFs) used by larger investors will add 120 million ounces to their holdings, up from 81.7 million ounces last year, said the report, prepared by consultants Metals Focus.
That stockpiling will blunt a fall in demand from industry to a five-year low of 475.4 million ounces from 510.9 million ounces in 2019 and from jewellers to a seven-year low of 187.5 million ounces from 201.3 million ounces last year, it said.
Total silver demand will fall to 963.4 million ounces — the lowest since at least 2011 — from 991.8 million ounces last year.
But silver supply will also fall below one billion ounces for the first time in years — to 978.1 million ounces from 1,023.1 million ounces in 2019 — as mine production declines.
That will leave the market with its fifth consecutive annual surplus in 2020, the report said.
Technical Indicators
Overall, the bias in prices is: Sideways.
The projected upper bound is: 16.63.
The projected lower bound is: 13.76.
The projected closing price is: 15.19.
Candlesticks
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 54.1313. This is not an overbought or oversold reading. The last signal was a sell 5 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 51.12. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 22 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -24. This is not a topping or bottoming area. The last signal was a sell 6 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 20 period(s) ago.
Rex Takasugi – TD Profile
PREC.M.XAG= closed up 0.083 at 15.238. Volume was 8,900% above average (trending) and Bollinger Bands were 20% narrower than normal.
Open High Low Close Volume 15.073 15.255 14.920 15.238 12,399
Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 15.35 15.65 17.01
Volatility: 36 62 39
Volume: 1,240 248 62
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
PREC.M.XAG= is currently 10.4% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods.
There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect very strong flows of volume into XAG= (bullish). Our trend forecasting oscillators are currently bullish on XAG= and have had this outlook for the last 9 periods.
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