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XAGUSD Market Update

2/16/2023 12:31 PM

Against the background of strengthening the US dollar, the XAG/USD pair continues the local corrective trend, trading at 21.76.

However, long-term factors are driving the upward momentum, with the Silver Institute reporting that demand for industrial use of the precious metal is projected to rise 2.6% to 550.0M ounces this year, driven by a booming EV market. Total demand is estimated at 1.15B ounces, up slightly from a year earlier, while supply could renew a maximum of 1.055B ounces, up more than 4.0% YoY. Analysts expect mine production to rise 5.0% to 873.0M ounces, the highest since 2016. As for the shortage of supply in the market, it is estimated at 119.0M ounces.

Against this background, the quotes of the XAG/USD pair will probably continue to be held around 23.00.

On the daily chart, the trading instrument has returned to the previously formed global ascending channel with dynamic boundaries 23.20–19.70 and may continue to move within it.

Technical indicators reinforce the sell signal: the range of EMA fluctuations on the Alligator indicator expands, and the AO histogram forms downward bars in the sell zone.

Support levels: 21.10, 19.60. | Resistance levels: 22.30, 24.00.

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