Silver investment: don’t count on silver this year? FED minutes are coming tonight! Fear another blow to the dollar!

Silver was at $17.525 an ounce in Asian trading on Wednesday. Silver held steady on the day, hitting an intraday high of $17.580 an ounce, now up 1.15 percent.

On the outlook for silver, JamesO ‘rourke and Alexander kozul-wright, commodity economists at Capital Economics, wrote: “as a safe haven, silver’s performance relative to gold has been disappointing. Looking ahead, silver is expected to underperform gold until the end of 2020.”

Any price increases due to the reopening of the economy and an improving industrial outlook will be offset by lower safe-haven demand, the report said. The outlook for silver is relatively poor. With the global economy recovering slowly in the second half of the year, silver’s (marginal) gains from industrial demand are expected to be offset by a decline in safe-haven investments, driving prices lower by the end of the year.

But the report predicts silver will look even better after 2020, as a “long-term recovery” in industrial metals demand will provide more support to prices and push silver to “eventually outperform gold” in the face of reduced safe-haven demand.

At 02:00 Beijing time on Thursday, the federal open market committee releases the minutes of its April monetary policy meeting.

Analysts said investors need to pay close attention to fed officials’ views on the economic outlook and current low interest rate policy in the minutes. If the minutes are dovish, the dollar could come under further pressure.

Technical analysis:

The dollar

On the daily chart, the U.S. dollar index maintained the trend of retreat, MACD green kinetic energy column unchanged, KDJ random index further sharply lower, indicating that short dollar momentum is still strengthening, then the U.S. dollar may continue to expand its decline.

The 4-hour chart shows the U.S. dollar index (dxy) trading in a narrow range after a volatile fall, while the MACD green column narrowed and the KDJ random index turned higher, indicating the dollar may struggle to rebound from its low in the near term.

silver

On the daily chart, silver prices steady strong rally, MACD red kinetic energy column steady, KDJ random index moderately higher, indicating silver steady upward momentum, next expected to continue to expand the upward trend.

On the 4 hour chart, silver prices to maintain a shock rally, MACD red kinetic energy column unchanged, KDJ random index moderately higher, indicating that silver short term will continue to rise.

Fundamental positive factors:

  1. Worldometers world real-time statistics show that as of May 20, Beijing time, the global total number of confirmed covid-19 cases has exceeded 4.98 million, reaching 4982,057, and the total number of deaths has exceeded 324,000, reaching 324,489. The United States has the highest number of confirmed covid-19 cases in the world, with more than 1.57 million cases and 157,063 cases, and more than 93,000 deaths and 93,500 cases.
  2. President Donald trump on Tuesday announced rules for a $19 billion U.S. farm aid program that will allow farmers to begin filing applications next week. The usda has announced that farmers who suffer a price loss of 5 percent or more can receive direct payments of up to $250,000 each.
  3. Federal reserve chairman colin Powell and Treasury secretary Steven mnuchin appeared before the senate banking committee on Tuesday, and both sides signaled more easing. Mr Powell said he was “prepared to take further stimulus action if necessary”. Mr. Mnuchin said the government was “fully prepared to take the losses” and provide relief to businesses hit by the covid-19 outbreak.
  4. New home starts fell an annualized 30.2 percent in April, while building permits fell 20.8 percent in April, according to data released on Tuesday. The impact of the epidemic on the U.S. housing market and the economy has made this what should have been a very good year for the U.S. housing market, but now everything is full of uncertainty.

Fundamental negative factors:

  1. As of Wednesday, every state in the United States will begin unwinding measures put in place weeks ago to contain the spread of the coronavirus — even as the daily rate of new cases continues to rise in some parts of the country. The last state to lift some restrictions is Connecticut, which will allow outdoor dining venues, offices, retail stores and malls, museums and zoos to reopen with restrictions on Wednesday.
  2. Us biotech company Moderna says that the vaccine mrna-1273 for covid-19 is safe and well tolerated; The final phase of vaccine trials is expected to begin in July. Dynavax, an American biopharmaceutical company, followed with good news. A novel coronavirus vaccine trial could take place as early as July, the company said.
  3. The announcement by European countries that they would lift travel restrictions in the schengen area and agree to set up a 500 billion euro recovery fund strengthened market expectations for the unlocking of advanced economies.
  4. US President Donald trump says it’s good to see that America is getting back on track, that America needs sports to lift its spirits, and that hopefully, the stadiums will fill up again. From an economic point of view, 2020 is going to be a great year.

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