Silver Price Analysis: XAG/USD risks a move lower to test $24.60 while below $27.54/$28.09 – DBS Bank

XAG/USD has lost the price leadership advantage accorded from 2020’s gold/silver ratio, as that ratio has unwound two-thirds of a prior price length. Speculative accounts are unwinding mispriced longs, bringing XAG’s net length to 26,326 contract, which is lower by 11% vs the prior reporting week. As such unwinding heads for completion, strategists at DBS Bank are patiently looking for green shoots. 

See – Silver Price Analysis: XAG/USD to sink towards $20 by year-end – CE

Key quotes 

“Much of the market’s overt preference for silver to gold is largely over. If you examine one-year implied option volatility for both gold and silver today there is hardly a choice between the two precious metals at this juncture. So do not count on silver to deliver price leadership over gold, as the ratio has unwound two-thirds of its price length.”

“As long as silver keeps its nose under 27.54 and follow-on resistance at 28.09, there remains scope for a re-run lower to test the key moving support at 24.60 and the Fibonacci marker just below at 23.05. This is in sync with positioning reports showing speculative accounts are unwinding mispriced longs, bringing silver’s net length to 26,326 contract, which is lower by 11% vs the prior reporting week. Once done and dusted, we look to silver as better placed to look for a green shoot recovery.”