Silver has been on a downtrend since June, as the US started to turn bullish on the back of hawkish FED comments after some really high inflation numbers. Safe havens started to retreat as the sentiment improved and the USD got stronger. The pace of the decline has slowed in the last few months, but the trend remains bearish, with highs getting lower after the retraces higher and moving averages acting as resistance.
Right now, the price is trading below the 50 SMA (yellow) and the 100 SMA (green) which have acted as resistance before. The price has formed two small dojis below these MAs, which are bearish reversing signals after the climb, and the price is overbought on the daily chart now. Apparently, the Omicron variant is not having a major negative impact on the economy.
I’ve mentioned quite a few times already that I just don’t see any bigger risk to the global recovery than China. The Omicron risks are something that will percolate to global supply chains, inflation, and thus to the central bank outlook as well. And with Beijing being hit now, there’s more scrutiny than ever, and suspicions that China will try to control the situation.
But it might not be too bad. The GDP figures from China this morning were okay, so the sentiment should improve in the coming days.
Chinese Q4 2021 GDP Report
SILVER
Read More: Selling Silver XAU as Omicron Fears Abate, Chinese Economy Holds