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Silver Demand is Starting to Recover

8/10/2022 1:09 PM

The XAG/USD pair continues its local upward trend, trading around 20.38 against the background of the multidirectional dynamics of the US currency.

Since the beginning of the summer, the US dollar has been actively growing, reaching record highs of 109.000 in the USD Index, but now the positive dynamics are almost completely leveled, and real rather than speculative trends have come to the fore again. So, this year there is a record demand for physical silver from the industry. According to the world's largest exchange vault of metals in London since the beginning of the year, its reserves have decreased by 15.5%, while gold has decreased by only 1.1%, which analysts attribute to the recovery of the Indian jewelry market.

Over the past week, the demand for exchange contracts based on silver has increased. According to the US Commodity Futures Trading Commission (CFTC), net speculative positions rose to 1.0K contracts after falling to –4.5K contracts a week earlier. The last time negative demand values ​​were observed was in the summer of 2019 when silver prices were preparing to make one of the biggest leaps in history, from 14 dollars to 20 dollars per ounce.

The trading instrument continues its upward correction, approaching the resistance line of the global downward channel. Technical indicators reversed and gave a buy signal: indicator Alligator's EMA oscillation range expands upwards, and the histogram of the AO oscillator forms upward bars in the buying zone.

Resistance levels: 20.67, 22.31. | Support levels: 19.88, 18.40.

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