Commodities Analysis by Fawad Razaqzada covering: XAU/USD, XAG/USD, Gold Futures, Copper Futures. Read Fawad Razaqzada's latest article on Investing.com
Silver broke above $30, signaling a sustained rally driven by weak US data, a softer dollar, and global economic improvements.Key support lies at $31.60 and $30, while resistance levels are at $32.13, $33.58, and $35.91, with potential consolidation patterns for further gains.extended its rally, following its big gains from the week before. Both metals eased off their best levels by early European trade. But the significant breakout above $30 means silver could be heading much higher.
What’s more, there is a broader macro driver behind precious metals and other commodities like silver. China’s various stimulus measures have helped to bolster demand or perceived demand for commodities, while we have seen improvement in Eurozone and UK data. In fact, that’s precisely what happened at the Asian open overnight as precious and base metals surged higher, sending gold to a new record, before pulling back a little.
It would be best if that potential consolidation forms around current levels or slightly higher, instead of, say, the high $30s, so that it allows traders who missed out on the move to get on board while prices are still attractive. Among other patterns, these include a falling wedge, a bull flag, and various forms of triangles. Such consolidation patterns would also allow technical overbought conditions to be worked off through time than price action.
On the upside, the 161.8% Fibonacci extension level of the short-term downswing from the April high to the early May low comes in around $32.13. Silver has already tested this level overnight, and went above it, before dipping on profit-taking.
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