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Silver is Back to 2022 Opening Prices
12/29/2022 1:16 PMQuotes of the XAG/USD pair continue to move upwards around 23.65 amid the weakening of the US dollar and the gradual lifting of coronavirus restrictions in China, the world's largest consumer of precious metals.
So, from January 8, passengers arriving in the country will not undergo a five-day quarantine, and COVID-19 has been excluded from the list of diseases of class A for which special border control restrictions apply. The authorities have followed a "zero tolerance" policy for the coronavirus for three years, resorting to tough measures to prevent the spread of the infection, including mass lockdowns. At the beginning of 2023, easing could lead to an increase in production and, as a result, an increase in demand for silver.
Meanwhile, according to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, the number of net speculative positions in silver amounted to 29.8K compared to 22.8K a week earlier. If you pay attention to the balance, the "bears" continue to strengthen their leadership: in positions with swap dealers, their balance is 42.638K against 36.533K for the "bulls." As for local dynamics, sellers opened 2.651K more deals this week, while buyers reduced their number by 0.379K. Against this background, silver prices returned to the opening prices of 2022, around 23.00–23.50.
The long-term trend remains upward. Last week, market participants tried to break through the resistance level of 24.25, but it was held, as a result of which the price went into a correction. The nearest strong support is 22.75, from which it is worth considering new long positions with the target at 24.25.
The medium-term trend is also up. In mid-December, the trading participants broke through the target zone 3 (23.35–23.18), and the quotes rushed to 25.05–24.88. Currently, the XAG/USD pair is trading in a downward correction, the likely target of which is the key trend support at 22.59–22.42. If the price tests it, it will be possible to consider new long positions with the first target at last week's high of 24.27.
Resistance levels: 24.25, 26.10. | Support levels: 22.75, 22.00.
