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XAG / USD: prices for precious metals will continue to grow

Technical analysis and trading recommendations -

Despite coming recently from the United States is very positive data on the state of the economy and the labor market in the country, the US dollar is in a downtrend against other major currencies, precious metals and competitors.

The dollar fell sharply across the financial markets after the known solutions and comments regarding the Fed's future monetary policy plans in the US, made last week. The Fed left its key interest rate unchanged at 0.5% and lowered its forecast for future rate hikes. In 2016, it is now planned to increase two key interest rates instead of four to the level of 0.875%.

Low interest rates in the US, as well as discreet plans for future rate increases contribute to the growth of prices for precious metals.
Also, demand for precious metals as safe-haven assets, contributes to the continuing geopolitical tensions in some parts of the world and the instability in global financial markets.

Gold strengthened in price by about 19% since the beginning of the year. Today, there is also the price increase with the opening of the trading day.
Silver is compared with gold strengthened by about 15% since the beginning of the year. Many economists, despite the reduction of quotations of gold in the last days believe that gold prices will continue to rise and could reach the mark of $ 1,300 by the end of the year an ounce. Those. It expected to increase further by about 5% from current levels. Given the lag growth in silver prices of gold expected to rise XAG / USD pair for another 8-10%. If the pair XAG / USD is currently near the 15.90 level, and taking into account the above considerations, the pair may rise to levels of 17.15, 17.40. If you adhere to the above analogy behavior of gold and silver prices, the rise in silver prices can be even stronger, at least to the level of 17.80, which runs through the 144-period moving average on the monthly chart. As for the pair XAU / USD, it has long been is well above its 144-period moving average on the monthly chart.

Silver is, relative to gold, is another important argument in favor of the growth, because It is the raw material for the industry, and the industry recovery and growth periods of demand for this precious metal increased.

When fixing prices below the level of 15.00 dollars per ounce, this scenario will be canceled.

Tuesday, 22 Mar, 2016 / 12:46

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