As a result of the weakening of the US dollar and the recovery in demand for silver, the XAG/USD pair rose to 21.55 and is preparing to continue its upward movement towards 22.40.
In November, China's top political leadership announced that quarantine restrictions on businesses would be gradually lifted and completely ended in 2023. Buyers of silver took the news positively, as a result of which, from November 1 to November 15, the metal rose in price by 13.0%, but after new outbreaks of COVID-19 registered in Shanghai and other major cities, the asset fell to the 20.80–20.50 area. Yesterday's positive dynamics of the trading instrument were associated with the publication of the minutes of the last meeting of the US Federal Reserve, which indicated that the rate of interest rate increase would be reduced to 0.5%. Also, regulator officials expressed concerns about a possible recession in the country.
Meanwhile, according to the latest report from the US Commodity Futures Trading Commission (CFTC) last week, net speculative positions in silver amounted to 17.6K against 13.0K a week earlier. The balance of sellers and buyers has almost leveled off: the "bulls" still hold the lead in transactions with swap dealers, but the gap is getting smaller, and the ratio is 39.368K for buyers against 38.601K for sellers. This week, the "bears" significantly increased the number of contracts, reaching 6.114K, while the "bulls" reduced them by 0.348K positions.
Regarding technical analysis, the XAG/USD pair is trading within a long-term uptrend. After the breakout of the 20.80–20.50 area, the target for purchases is 22.40, and the specified range acts as support, which the market participants unsuccessfully tested this week, which suggests the development of positive dynamics in the next few weeks.
The medium-term trend is upwards. Last week, traders broke the target zone 2 (21.65–21.48), and the next buy target was zone 3 (23.35–23.18). On Monday, the price corrected to the area of the key trend support 20.60–20.37, which the buyers held. As a result, a new upward impulse began to renew the high of the last week at 22.20.
Resistance levels: 22.40, 24.25. | Support levels: 20.80, 20.50, 18.50.