Silver and Copper seem to be in a consolidative condition since September started nearing a close. Investors are nervous, waiting for the results of another fiscal stimulus move from the USA government. Currently, with the election nearer as ever and with people wondering who will sit in the Oval Office in the next four years, we must ask if the results decide what’s to arrive for XAGUSD and copper, specifically for silver investing and copper trading.
There is a fairly inverse relationship happening between the USD and silver and copper over the course of 2020. XAGUSD can also be taken into account as an anti-fiat hedge, like gold and gold trading. The Fed’s by-product of relaxing steps to boost the economy this year was a cheaper currency as uncertainty receded. This has increased the price of silver, which remains up for more than 30 percent this year, and affected silver trading.
Copper is usually used as an indicator of global development. Following dropping around 30 percent from January to March during the first stages of the pandemic, copper prices soared for more than 60 percent prior to stabilizing anew more than 30 days ago. This probably represented the expectations for growth as countries around the globe took on stimulus initiatives, monetary and fiscal ones alike, to help the failing global economy that nearly froze with the pandemic-induced lockdowns.
Silver and copper pricings are now waiting for the outcome of the presidential election, and we will see how will this fair with activities like copper investing. Besides the future of another stimulus plan, the prospect of carrying on with the trade wars is also on the agenda. Rising hopes for Biden’s victory have opened the door to more aid, based on the Senate’s composition. This might, in fact, work particularly well for the price of silver and red metal.
President Donald Trump’s second win is expected to provoke uncertainty in the upcoming weeks. This could fuel interest for liquid hedges, of which the USD and the Treasury are conventional options. A result like that could affect the price of silver and copper. But, as the heat fades out, concerns of growing US-China tensions could dispel the growth of red metal. Whatever the case, a low-interest-rate setting may help to mitigate downside prospects.
SILVER TECHNICAL ANALYSIS
Silver prices are putting pressure on a downward resistance channel since the end of August. The technical outlook is marginally downward in the face of the bearish ‘Death Cross.’ This was created in September when the fifty-day Simple Moving Average (SMA) exceeded the twenty-day SMA. Meaningful upside improvement is expected to result in a drive across the 25.04 – 25.56 resistance zone. The resumption of the July peak will put the emphasis on the low of September at 21.66.
COPPER TECHNICAL ANALYSIS
After continuous losses since the end of October, the red metal futures slowed down on the fifty-day SMA and the upper limit of the growing support channel from the third month. A rise over the 3.0945 inflection mark reveals 3.2180 for an opportunity to restart the prevailing uptrend into the 2018 peaks. Alternatively, going below rising support reveals the 2.8775 – 2.8345 support area to the August low.