Solid News
The Silver Price is Correcting Downwards
1/19/2023 1:39 PMAfter another unsuccessful attempt to break through the resistance level of 24.25, the XAG/USD pair began a downward correction against strengthening the US dollar.
Yesterday's data on US industrial production for December rose by 1.65% YoY, less than the previous value of 2.18%, and it lost 0.7% MoM, worse than the forecast of –0.1% and the previous value of –0.6%. The decline in the indicator will likely continue in the first quarter, increasing the risks of a recession or economic stagnation. Since silver is used in industry, the demand for it is weakening, negatively affecting the quotes of the asset.
According to the latest report from the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions in silver amounted to 29.0K against 30.9K a week earlier. The "bears" still hold the lead among swap dealers: the gap continues to grow even with the outflow of investors, amounting to 45.826K contracts against 35.564K for the "bulls," and this week sellers reduced the number of transactions by 0.182K, while buyers lost 1.596K, which indicates a slight drop in demand for the metal.
The inability of buyers to consolidate above 24.25 led to a downward correction in the asset. A strong support level is around 22.75; if it is reached and broken, the long-term uptrend will continue with the target at the January high of 24.45, and after its breakdown, the decline will continue with the target at 22.00.
The medium-term trend remains upward, and zone 4 (25.05–24.88) is the growth target. Now the price is falling within the correction towards the key trend support around 22.80–22.63, after which it will be possible to consider new long positions with the target at the January high at 24.45.
Resistance levels: 24.25, 26.10. | Support levels: 22.75, 22.00.
