Silver isn’t the Shiniest Metal, but It still Looks Good

If traders are weary of buying XAU/USD near recent highs, a better setup may be in XAG/USD!

Uptrend 3

When most people think of a beautiful, shiny metal, usually the first one to come to mind is Gold.  The same can be said for when people are trading Gold.  There are plenty of sayings about gold in the trading world, such as “Gold is a good inflation hedge” and “Gold and stocks move in opposite directions”.  But how many times do you hear people talking about Silver?  Not so much.  However,  silver is still a precious metal and people do trade it.  Granted, it might not be in as much demand as gold, however when gold moves higher, the precious metals complex is sure to follow.

Since the recent low was put in on March 16th, silver (XAG/USD) has bounced to near horizontal resistance and the 61.8% from the highs of February 24th highs to the March 16th lows. 

Source:  Tradingview, FOREX.com

XAU/USD has pulled back to horizontal support in a corrective like fashion and appears to be forming a pennant formation.  The target for this pennant is near 19.00, which would be a retest of the February 24th highs!  If silver is to bounce from current levels of near 15.07, there is strong resistance near 16.00.  Two horizonal resistance levels come across near 16.50 and 17.25 before the 19.00 level.  First horizonal support is at 14.70 and again at 14.25.  However, if price breaks below, it can fall to 13.00 very quickly.

Source: Tradingview.com, FOREX.com

If traders are looking for the direction of precious metals, they should look at XAU/USD.  However, if traders are weary of buying XAU/USD near recent highs of 1747, it may be worth looking at XAG/USD for a better trading setup!


Related Articles

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.