Silver Price Forecast: XAG/USD recovery stalls below $48,00

LONDON (November 5) Silver (XAG/USD) is posting a frail recovery on Wednesday, trimming losses after a three-day reversal. The pair bounced from $46.90 lows on Tuesday, with precious metals favoured by the risk-averse sentiment, although bulls lack momentum as price action nears the 48.00 area.

The relatively high US Treasury yields and a firm US Dollar, with the USD Index steady at three-month highs above the 100.00 psychological level, are weighing on Silver. Investors are wary of selling the US Dollar, ahead of the releases of the US ADP Employment Report and the US ISM Services PMI for further insight into the Federal Reserve's near-term decisions.

Technical analysis: Looking for direction around $48.00

From a technical standpoint, Silver is trading halfway through the last two weeks' range, as the corrective reversal from long-term highs at $54.86 found support around the 50% Fibonacci retracement of the August - October rally, at the $45.85 area. The pair has been bouncing between that level and $49.35 ever since.

To the upside, a confirmation below the mentioned $49.35 level (October 23, 31 highs), might find resistance at a previous support in the area of $50.40-50.60, where bears were contained on October 13 and 17. Further up the target would be the October 20 high, near 59.80.

Immediate support is at Tuesday's low near $47.00, ahead of the mentioned $45.85 area (October 28 low). A confirmation below here would provide a further impulse for bears to target the 61.8% Fibonacci retracement of the previously mentioned cycle, and the September 24 low, at $43.80.

FXStreet