Silver XAU Remains Supported by SMAs, As Precious Metals Turn into Risk Assets

Safe haven assets such as Gold and Silver used to rally when the risk sentiment turned negative and vice versa. In the last few months though, precious metals have been following risk assets. This is strange but we live in pretty strange times. XAG/USD was bearish until the middle of this month with moving averages providing resistance, while in the last two weeks the trend has shifted to the upside, which is shown by moving averages that are working as support.

We decided to open a buy silver signal last Friday after the pullback lower and the price bounced off moving averages. But it narrowly missed our take profit target and now Silver has returned back down to the MAs which are providing support again. Gold has already started to bounce as risk picks up again today, shown by the bullish momentum in stock markets, so we are waiting for Silver to do the same.

Silver Daily Chart – MAs Have Turned Into Support for XAG

The trend has shifted in the last two weeks

Eurozone May Final Consumer Confidence

• May final consumer confidence -21.1 vs -21.1 prelim
• Economic confidence 105.0
• Prior 105.0; revised to 104.9
• Industrial confidence 6.3
• Prior 7.5; revised to 7.7
• Services confidence 14.0
• Prior 13.5; revised to 13.6

A slight improvement in economic sentiment but perhaps the more notable detail is that consumer price expectations declined once more from 50.0 in April to 45.6 in May. That said, euro area inflation remains rather elevated for the time being as we have seen so far from Spain and the German state readings today.

Silver XAG Live Chart

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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