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Silver (XAG=X) Technicals and Charts from Metastock

$XAG #Silver #FX #Commodities #Trading #Markets #Metastock

Silver
Ticker: XAG=
Price: $23.98

Silver Outlook

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Despite the economic turmoil currently plaguing many businesses and households across Canada, Prime Minister Justin Trudeau announced that Canada will still continue to trudge ahead with its 2030 emission targets, and pledge billions of dollars towards combatting climate change. The latest plan, called “A Healthy Environment and a Healthy Economy,” is the federal government’s effort to regain momentum in Canada’s climate change agenda, as well as align the country’s environmental policies with upcoming pledges made by US president-elect Joe Biden.

Indeed, the reignited climate change and emission reduction goals will push Canada towards a green transformation, and coupled with a Biden presidency that has already pledged to support solar energy investments and zero-emission transportation, the demand for renewable energy will only continue to grow. As a result, some of the inputs that are needed for applications related to green energy will also see their demand multiply, including silver – which up until now, has been significantly undervalued relative to gold.

According to a recent report by Saxo Bank, the demand for silver will soon outstrip its supply, as the number of applications for the commodity continue to grow amid increasing green initiatives. Solar panel production in particular will create a significant push for silver, given that the metal has the lowest electrical resistance relative to all other metals in standard temperatures. In fact, other substitute metals are unable to match silver in energy output, lifespan duration, and reliability when it comes to the commercial development of solar panels.

As more and more countries continue to adapt climate conscious policies, the production of solar panels is expected to rise by more than 50% by 2025. This would certainly uphold the strengthening demand for silver, especially as economies continue to recover from the pandemic. In fact, analysts foresee an increasing number of governments including some form of funding for green initiatives in their emergency stimulus plans, such as Canada for example. This will further push the industrial portion of their economies towards innovations that use the precious metal as an input.

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On the supply side though, the coronavirus pandemic has punished silver mine output. Global production is expected to drop by 6.3% to approximately 780.1 million ounces this year, largely due to mine shutdowns in wake of infection fears. However, even prior to the pandemic though, mine output was already beginning to slide, as production declined by 1.3% in 2019. In the long run, Saxo Bank notes that over half of mined silver supply has thus far been a by-product of zinc, copper, and lead mining, thus making it difficult for miners to satisfy the surplus proportional demand for silver.

Although silver has historically been significantly more volatile than gold, the solar panel industry will likely steady the overall demand for the precious metal in the industry setting. Taking into consideration the bigger picture, silver does tend to coincide with gold fluctuations over time. Albeit currently the silver-gold metal ratio of over 76-to-1 suggests otherwise, historical data points out that the gap between the two metals will eventually close.

However, taking the current economic conditions and unprecedented monetary policy in response to the pandemic into consideration, a continued bull run is likely on the horizon. This means that silver will probably fluctuate in the same direction, coupled with a boost from rising industrial demand.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 25.57.

The projected lower bound is: 22.25.

The projected closing price is: 23.91.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 30.3518. This is not an overbought or oversold reading. The last signal was a sell 3 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 48.63. 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 57 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 29. This is not a topping or bottoming area. The last signal was a sell 3 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 7 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAG= closed up 0.004 at 23.916. Volume was 8,900% above average (trending) and Bollinger Bands were 46% narrower than normal.

Open    High    Low    Close    Volume
23.900  24.000  23.870 23.916   914
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period    50-period     200-period
Close:           24.11        24.14         20.90
Volatility:      39           44            58
Volume:          91           18            5

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 14.5% above 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 4 periods.

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HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

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