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Investor Interest Returns to the Silver

1/5/2023 11:06 AM

During the Asian session, the XAG/USD pair shows ambiguous trading dynamics, holding near 23.70.

Yesterday, the asset was declining against the backdrop of the publication of the minutes of the US Federal Reserve meeting and the closing of part of long positions by investors ahead of the release of data on the number of employed outside the agricultural sector from Automatic Data Processing (ADP) on Thursday: analysts' forecasts suggest an increase in employment by 150.0K after an increase of 127.0K last month. Expectations from the final report from the US Department of Labor are not so positive: experts expect a further decline in average hourly wages and an increase in the number of new jobs by only 200.0K after increasing by 263.0K in November. If the indicators show stability, inflation remains at 3.7%, and employment justifies forecasts. The US regulator will receive an additional argument in favor of further tightening monetary policy to combat the rapid growth in consumer prices, which will put additional pressure on the position of the precious metal.

According to the US Commodity Futures Trading Commission (CFTC) report last week, the number of net speculative positions in silver amounted to 31.0K against 29.8K a week earlier. The "bears" continued to strengthen their leadership: on transactions with swap dealers, the gap this week increased even more, reaching 44.599K against 37.004K for the "bulls." This week, sellers increased the number of contracts by 1.960K, while buyers – increased by only 0.471K, which indicates temporary neutrality.

On the daily chart, Bollinger bands tend to turn to the horizontal plane: the price range narrows from below, reflecting the emergence of ambiguous trading dynamics in the short term. The MACD indicator is going downwards, keeping a strong sell signal (the histogram is below the signal line). Stochastic shows similar dynamics, rapidly approaching its lows, which indicates that silver may become oversold in the ultra-short term.

Resistance levels: 24.00, 24.42, 24.67, 25.00. | Support levels: 23.60, 23.32, 23.00, 22.70.

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