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Technical and fundamental analysis for Silver – March 2022

Published by Karl Martin Karus in category Technical & Fundamental analysis on 14.03.2022
Gold price (XAU-SEK)
18 371,26 SEK/oz
  
- 139,91 SEK
Silver price (XAG-SEK)
213,49 SEK/oz
  
- 0,74 SEK

Gold & Silver ratio

In terms of commodities, silver has lived in gold’s shadow and, more often than not, moved in correlation with gold prices. Currently, the gold price is moving away from silver in terms of gold&silver ratio.

The gold and silver ratio average has considered being 58.4. The highest ratio difference was between the years 1990 to 1993, when the registered ratio was just above 90. Currently, the ratio is roughly 76.8.

Russia & Silver production

According to Capital.com Russia produced around 42.5 million ounces of silver in 2020, making it the world’s sixth-largest producer, from which it has progressively risen to become the fourth-largest by 2022.

The Dukat mine, the Mangazeisky mine, the Lunnoye-Arylakh mine, the Mayminovskoye mine, and the Kupol and Dvoinoye mine were the five largest silver mines in Russia as of 2020.

Polymetal International, one of the world’s largest mining businesses, owns the Dukat and Lunnoye-Arylakh mines. Polymetal International and Evraz, another mining behemoth, have been kicked off of the FTSE 100 index due to the war and following stock market falls.

Technical indicator analysis

Trendlines / Support & Resistance

*Red lines are downtrend. The heavy red line is the long-term trendline.
*
Green lines are uptrend. The heavy green line is a long-term trendline.
*
Blue lines are short term support & resistance lines

(picture 1. Trendline & Support/Resistance)

  • Like gold, silver price action has also broken out of the triangle wedge, indicating a strong move upwards.
  • Currently, on the 9th of March, silver is trading near a strong resistance level.
  • The probability for short-term correction is high.
  • The probability for a long-term bullish trend is high.
  • Silver must break the 26.2-26.4 price area and close above for the trend to be continued right away.
  • The next strong resistance appears to be between 28.3-29 USD/oz area.
  • When breaking the 28.3-29 USD resistance area, we can potentially see the price spike to as high as 35 USD/oz.

Moving Averages

  • In picture 1. There is an unsymmetrical red line – this is a 250-day moving average.
  • 250 Moving Average is the yearly moving average (weekends excluded)
  • Silver price is currently trading strongly above 250-MA, which indicates a bullish market.

RSI divergence

  • RSI indicator seems to be moving upwards oversold area and currently being in a price-healthy area.
  • The previously mentioned point might indicate that price movements upwards are highly likely since the oversold area is yet to come.
  • Short-term correction before trying to move higher is also a possibility.

Disclaimer: This article is for informational purposes only and is not intended as an investment analysis or recommendation to sell or buy commodities. Tavex is not responsible for any decisions made based on this information. Investing is associated with opportunities and risks, and the market value of commodities can both increase and decrease. Past or future yields on the commodities and financial ratios shown above do not represent a promise or an indication of future earnings.

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