Silver investment: The global epidemic continues to hit the economy! Hedging is still the theme! Precious metal bulls ready to move!

Spot silver was trading around $14.385 an ounce on Monday. Intraday silver maintained shock pressure, currently trading at $14.390 / oz.

Precious metals remain in wait-and-see mode, waiting to see how badly the global economy will be hit and how long depression-like conditions will last, said Edward Moya, senior market analyst at broker OANDA.

“We believe gold is likely to continue to play an important role in investor allocations in the coming months given the current turmoil,” ED&F Man Capital Markets analyst Edward Meir said in a note. However, volatility will remain quite high.”

At the same time, analysts believe a more robust dollar would normally dampen the performance of precious metals, which are priced in dollars, but that has not happened in the past two sessions. Gold was generally pushed higher as the region reported its first big gains, and it appears traders are continuing to buy safe-haven assets such as precious metals in the face of a potentially worsening economic backdrop.

On the alert for a further global outbreak, risk aversion will continue to spread and precious metals bulls may be heading for a bigger outbreak.

Technical analysis:

The dollar

On the daily chart, the dollar index rebounded further from its lows, with the MACD green momentum column narrowing and the KDJ random index slightly tilted upward, indicating that the dollar rally momentum is still there and may continue to move upward.

On the 4-hour chart, the dollar index showed a modest rebound, the MACD red kinetic energy column unchanged, the KDJ random index moderate flat, indicating that the dollar may be caught in a short period of narrow consolidation trading.

silver

On the daily chart, silver trading in a tight range, the MACD red kinetic energy column slightly expanded, the KDJ random index moderate pressure, indicating that silver may continue to trade in a tight range.

On the 4 hour chart, silver prices show a fairly narrow finishing trading, MACD red kinetic energy column unchanged, KDJ random index moderate decline, indicating that silver short will continue to narrow finishing.

fundamentals Positive factors :

  1. According to the latest statistics, the total number of confirmed covid-19 cases worldwide has exceeded 1.27 million, and the total number of deaths is close to 70,000. The cumulative number of confirmed COVID 19 cases in the us exceeded 330,000, still, the highest in the world and Germany became the fourth country with more than 100,000 confirmed cases.
  2. British prime minister Boris Johnson, who has been quarantined for 10 days with a novel coronavirus, has arrived at a hospital for tests.
  3. A record 6.648 million people applied for unemployment benefits in the week ended March 28, the labor department said on Thursday. Economists expect another four to five million workers to file for unemployment benefits last week as the coronavirus-related shutdown spread across the country. Estimates are as high as 9 million.
  4. The institute for supply management’s manufacturing index fell below the 50.0 line of expansion and contraction in March on Wednesday. The ISM manufacturing index fell to 49.1 last month from 50.1 in February. The decline in economic activity was driven by a sharp drop in new orders and output, the data showed.

Fundamental negative factors:

  1. The queen’s speech: “Although we have faced challenges before, this one is different. This time we join all nations in the global effort to heal with advanced science and our sincere passion. We will succeed, and success will be ours.”
  2. April 1 the federal reserve reduced the likelihood of a dollar crunch by expanding the ability of dozens of foreign central Banks to obtain dollars during the novel coronavirus crisis, allowing them to swap their holdings of U.S. debt for overnight loans in dollars.
  3. The sell-off in global stock markets highlights the growing risk of an outbreak that shows little sign of abating, given mounting evidence of a sharp global economic downturn. The dollar’s status as a global reserve currency makes it a natural safe haven.
  4. Russia’s central bank said it would stop buying gold from April 1, without explaining why.

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