Silver analysis – 28 May 2019

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Does silver follow the Gold or Manufacturing?

By: Ahura Chalki

In General idea and outlook, silver follows the Gold trend and most of the time, they both have a bearish or bullish trend, but not always. Sometimes they both can play totally different rules and get totally opposite effects of Market news, while some news will affect them in the same way. Let’s give you an example.

If we classify the news in two main parts, like Geopolitical and Economic news.  Some economic news like manufacturing usually has a totally different effect on Gold and Silver, while positive manufacturing support Silver price, because of economic growth and more buyer, negative manufacturing data will push it down and this exact data most of the times will be the reason of moving the funds from Manufacturing to Gold market, because of economic grow concerns.

In the other hand Geopolitical news, especially political and military tensions do effect almost in the same directional for both metals, because in these kinds of situations, Silver also can play the rule of safe heaven, however, it also depends in economic growth in that period.

Let’s check what is going on in the market now. Economic negative data would not let Silver grow, while Gold was growing up, because of negative fundamental data to play the safe haven role, while geopolitical tensions were all around the world, that’s why it was facing negative and side movement in the past period. Therefore next movement and trend for silver will depend on coming economic data from Stock exchanges as well as the powerful or weak manufacturing data.

And in the end, we should keep in mind the economic war of the US and China and see where this game will end as it effects so much on manufacturing and economic growth.

From the technical side, the current level of $14.50 is a very strong support level in the H4 chart and $14.77 is a key resistance level. In the H1 chart, while EMA moves under 14 days period line, stochastic still moves around the oversold area, however since it is in general downtrend, it cannot be read as a reverse sign.

 

Pivot point: 14.55

Resistance Levels: 14.60 / 14.64

Support Levels: 14.50 / 14.46

 

The expected trading range for today is between 14.46 support and 14.64 resistance.

Note

The analyses here are just an Idea and no investment consulting. Invest in the Financial market has a high level of risk. In case if you are looking for a personal investment consultant, can contact us.


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