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Why an Upside is Likely For Silver

Silver is having a bad year. Like other metals, silver has declined by more than 8% this year. It has moved from a YTD high of $17.6 and on Monday, it reached the YTD low of $15.1.

Silver is a different metal than gold. While the two metals are found deep inside the earth’s crust, they have different uses. Gold is used mostly as an investment while silver is used mostly for industrial purposes. It is used in the manufacture of jewellery, mirrors, and kitchen products. The biggest producers of silver are Mexico, Peru, and China.

Silver is often known as gold’s poor cousin. This is because an ounce of silver sells for $15 while the same amount of gold sells for more than $1200. Today, the ratio of gold to silver is 1:81.

This year, silver has been on a decline, which is mostly because of the challenging trade issues. It has also underperformed gold, which is down by 6% this year.

Today, silver has reached $15.45, which is slightly higher than the 50-day EMA and lower than the 100-day EMA. The price is also above a key trendline as shown below. If the price rises, it will likely test the $15.6 level.

There is a likelihood that the price of silver will move higher as gold rises. Last week, the US president attacked the Fed for hiking interest rates. While the Fed will likely ignore the president, there are indications that it will reduce the rate hikes in the coming year. If it does this, the price of gold could move higher as the dollar weakens.

The post Why an Upside is Likely For Silver appeared first on Forex.Info.

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