Key Points

• Safe haven status
• Mixed economic data
• U.S. Dollar recovery stalls commodities’ bullish run
• Prices are range bound

The demand for Silver has largely been attributed to its industrial uses, but as of late its demand as a safe haven asset has contributed to it sustained price increase during the pandemic. Silver is displaying an undeniable inverse relationship with the US Dollar, indicating its apparent use as a hedge against inflation and declining yields on several assets. This means that Silver has joined its sibling Gold in evolving into inflationary hedges and a path to portfolio diversification, especially during periods of economic and geopolitical uncertainty. On that note, the price of Silver has traded sustainable around the $24.00 per ounce region as the global economic outlook remains clouded with the adverse effects of the pandemic.

Mixed economic data has managed to  hold bulls at bay as the global economic recovery staggers under the weight of a second wave of the novel coronavirus. Weak economic data postulates that industrial and manufacturing demand for Silver and other industrial metals is bound to remain subdued. For instance, the latest Industrial Production data from the UK indicates that the sector has remained in the contraction zone with a reading of -5.5%. UK GDP has taken another dive, recording a mere growth of 0.4% as compared to 1.1% for the month of October.

Silver Daily Chart

The U.S. Dollar recovery brought the rally of various commodities to an abrupt stand still on Monday during the U.S. session. That greenback had slid to monthly lows below 92.00, hitting a low of 90.40. The correction that ensued meant that commodities followed suite but in the opposite direction. Silver reached a peak of $24.87 in the midweek rally before corrected down to the $23.83 support region.

On the technical frontier it is worth highlighting that Silver (XAGUSD) has become range bound. The range can be subdivided into a minor and a major range. The minor range spans from $22.50 to $25.14 whilst the major range extends from the resistance region at $21.66 to the November peak at $26.20 handle. Therefore, it can be argued that prices are prone to consolidate in this range until new information strikes the markets.

Trends

Moving Average	Simple	Exponential
60	24.12 SELL	24.12 SELL
100	25.07 SELL	23.59 BUY
200	20.79 BUY	21.96 BUY

Pivot Points (Daily)

Name	S3	S2	S1	Pivot	R1	R2	R3
Gold	1771.46	1799.08	1819.16	1847.53	1866.86	1895.23	1914.56
Silver	22.47	23.08	23.53	24.14	24.59	25.20	25.65
Platinum	845.86	972.13	990.01	1016.28	1034.16	1060.43	1078.31
Palladium	2181.41	2219.58	2242.91	2281.08	2304.41	2342.58	2365.91

Pivot Points (Weekly)

Name	S3	S2	S1	Pivot	R1	R2	R3
Gold	1701.74	1734.47	1787.24	1819.97	1872.74	1905.47	1958.24
Silver	19.98	20.97	22.61	23.59	25.23	26.22	27.86
Platinum	850.74	903.57	987.04	1039.87	1123.34	1176.17	1259.64
Palladium	2035.10	2130.10	2242.55	2337.55	2337.55	2450.00	2657.45