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Global Prospects of the Silver Market Ccause Investors' Concerns

9/8/2022 3:58 PM

Quotes of the XAG/USD pair are trading around 18.50, trying to form a new upward correction, but global factors remain negative.

The world's central banks are focused on tightening monetary incentives, which, in turn, acts as a catalyst for the growth of interest rates on debt obligations. The main competitors of gold and silver in terms of capital preservation are still bonds with an increased yield level, which continues to attract investors: for short-term annual US bonds since the beginning of summer, it has risen from 2.053% to the current 3.611%, while over the same period silver quotes have lost 22.12%.

Statistics of companies engaged in the extraction of precious metal indicate a negative trend in demand. Shares of Latin American manufacturer Industrias Penoles S.A.B. de C.V. fell by 43.0%, and the company's stability rating was downgraded to "BBB". Polymetal International plc. also suffered the largest losses, whose shares lost 83.0% against the background of the European sanctions policy, after which it was assigned a "hold" rating from one of the leading agencies Berenberg Bank.

Silver quotes continue to decline globally and are approaching the support line of a wide descending channel. Technical indicators, despite the slowdown, still hold a sell signal: the range of EMA fluctuations on the alligator indicator is slowly narrowing, and the histogram of the AO oscillator forms new bars, being in the sales zone.

Support levels: 17.78, 16.51. | Resistance levels: 19.24, 20.66.

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