Silver Signals a Change in Direction, Gold Toward Critical Support

Silver has dropped to the support level, which we consider important.

Why has the decline accelerated?

The main reason for this is that concerns about the global slowdown are still alive. The retraction in the manufacturing and industrial production sectors, especially in China, also reduces demand for commodities. China’s PMI numbers are bad. Finally, the , announced today, has entered the contraction zone again after a three-month rally.

On the one hand, economies are slowing, on the other, central banks are raising interest rates to reduce inflation. In this environment where the is also high, the pressure on silver and also increases. THE

about to break short-term support level

We state that we follow the range of 19.75-18.0 in silver as a sales region. In our latest review, we also reiterate that our expectation is a little more bearish. Silver dipped below the $18 level yesterday and saw $17.65 today, dropped to the lowest level after June 2020. The loss per year approached 24%.

The $18 level is an important support for the short-term direction and if the weekly close is below this level, pressure for ECB and ECB meetings could continue. In this case, $16.52 may be in question.

Bad data and high inflation may cause the European Central Bank this month. On the other hand, the likelihood of , as the Fed continues to make statements about not breaking the rigid stance. The pressure today is also due to these prices.

Looking at the medium-long-term outlook, if $14 breaks, there could be an accelerated decline for silver. In other words, it means the loss of the recovery that started with the pandemic. For now, we are short term and looking for a close of $18 in six weeks.

As the level is reduced, the range of 18 to 16.52 is a hard sell zone, while the range of 18 to 19.75 dollars can be considered a horizontal region in the trend.

The price dropped to the base $1,700. The important level for us is $1,676, which has been maintained even though it has been tried since March 2021. If not broken, trading can continue in a reasonable range near 1,780. But if it breaks, gains from the pandemic could be put at risk, just like with silver.

gold ounce september 1

gold ounce september 1

If we sum up our expectation;

In the short term, we expect the silver trade to remain in the 18-16.52 range.

We’re not sure that $1,676 can be protected in gold this time around, because with the winter period approaching in the global slowdown, Russia-Europe tension could escalate further and each rest means a spike in inflation as costs rise. of energy increase. Continuity can also be broken in energy purchased indirectly through China.

Again, with the onset of winter, the epidemic effect can be felt. Although there are no restrictions as in previous periods, we can observe difficulties in economic activities. As these developments are direct inflation and growth issues, we may witness an even further weakening of gold. (Unless there is a development, especially geopolitical developments).

In the following period, a range of 1,620-1,600 can be seen under the support of $1,676.

The article is in Portuguese

Tags: Silver Signals Change Direction Gold Critical Support

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