Categories: Forex News
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2023-11-03 10:26 AM

Silver Prices Dip; Investors Eye Critical Support Levels Closely

  • Silver Price Movement: Silver prices in South Africa, tracked through the XAG/USD pair, are showing a bearish trend, with the metal's price declining for the second consecutive day and marking the third drop in the last four sessions. The price has fallen to trade around $22.65-$22.60 (ZAR 416.76 - ZAR 415.84), with indications of a possible further slide.
  • Technical Analysis Indicators: The failure to maintain a position above the 200-day SMA and repeated rejections at the $23.60-$23.70 (ZAR 434.24 - ZAR 435.68) supply zone have led to a 'multiple tops' pattern, signaling potential future declines. A break below the $22.50 (ZAR 414.00) support level could accelerate losses towards $22.00 (ZAR 404.80) and potentially lower.
  • Resistance Levels and Bullish Scenario: Immediate resistance is at $23.00 (ZAR 423.20), with further resistance near the 200-day SMA at $23.25 (ZAR 427.60). A push above these levels, particularly beyond the $23.60-$23.70 (ZAR 434.24 - ZAR 435.68) zone, could negate the bearish outlook and shift momentum in favor of a bullish trend, aiming for the $24.00 (ZAR 441.60) mark and potentially the $25.00 (ZAR 460.00) psychological level.
By Nonhlanhla

Silver prices have entered a bearish domain in the financial landscape, reflecting a broader international market trend as the week draws to a close. Continuing its downward trajectory for the second consecutive day this Friday, the white metal’s performance has been lackluster, with declines marking three out of the past four sessions. Within the early European trading hours—a window that often sets the tone for the South African market—silver is trading in the vicinity of $22.65-$22.60 (ZAR 416.76 – ZAR 415.84), exhibiting a substantial daily drop of over 0.50%, with indicators pointing towards a potential for extended losses.

Silver’s recent inability to hold above the pivotal 200-day Simple Moving Average (SMA) and consistent rejection at the formidable $23.60-$23.70 (ZAR 434.24 – ZAR 435.68) supply zone have culminated in a ‘multiple tops’ pattern, historically suggestive of impending price drops. Traders in South Africa are thus advised to exercise patience and consider awaiting a solid breach below the support level of $22.50 (ZAR 414.00) before positioning for a continued bearish trajectory.

Should this support yield, we could see a hastened slide towards the $22.00 (ZAR 404.80) landmark, and possibly down to the $21.70 (ZAR 399.28) horizontal support. If the negative trend gains momentum, the next conceivable target would be within the $21.35-$21.30 (ZAR 392.84 – ZAR 391.92) zone, potentially pushing towards an extended fall beneath the $21.00 (ZAR 386.40) threshold, aiming for the seven-month trough seen in October near $20.70-$20.65 (ZAR 380.88 – ZAR 379.96).

On the upside, the immediate resistance is now encapsulated by the $23.00 (ZAR 423.20) psychological level. Climbing above this, silver faces the $23.10-$23.15 (ZAR 425.04 – ZAR 425.96) horizontal barrier, with the 200-day SMA close by at around $23.25 (ZAR 427.60). A definitive surge past these levels may set the stage to test the resilience of the $23.60-$23.70 (ZAR 434.24 – ZAR 435.68) supply zone. A clear break above this range could invalidate the current bearish outlook and pivot the market sentiment in favor of bulls, possibly propelling prices towards the $24.00 (ZAR 441.60) region.

Should the bullish undertone strengthen, we might witness XAG/USD ascending past the intermediate resistance levels of $24.20-$24.25 (ZAR 445.28 – ZAR 446.20), establishing a pathway for a renewed assault on the psychologically significant $25.00 (ZAR 460.00) milestone.

It’s imperative for South African investors to closely scrutinize these movements as the nation’s economic pulse often resonates with the fluctuations in the commodities market, given its rich mineral resources. Keeping abreast of the conversion rates and the influence of the Rand’s volatility against the dollar is crucial, as these dynamics directly affect investment strategies.

To encapsulate, the silver market’s direction appears tilted towards a continued downward movement, but critical technical markers will ultimately determine its trajectory. As international trends influence these technical indicators, South African investors are recommended to maintain an alert stance and make informed, data-driven investment decisions in the fast-paced and often unpredictable commodity market.

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Nonhlanhla

Nonhlanhla P Dube is a senior news reporter. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her on: Email: nonhlanhla@rateweb.co.za

Tags: Silver