XAG/USD forecast for 07.09.2020

September 7, 2020

XAG/USD forecast: Democrats will support silverDmitri Demidenko

Fundamental silver price forecast for today

Joe Biden’s approval rating rise, which encourages silver bulls

In June, my article [Silver is outperforming gold][1] read that silver was the most promising investment. Much time has passed since then. Silver meets the expectations, having strengthened by 50% since the beginning of the year. The performance is almost two times better than that of the sector leader, gold. The bet on the combination of the industrial and the investment demand is winning. However, the XAG/USD bulls have been set back recently, raising doubts in the silver rally. Is the [XAG/USD][2] uptrend has ended?

Fundamental analysis bases on the patterns, just like technical analysis. Investors look for similar situations in the past. They try to predict the future price trend, according to the patterns they witnessed in the past. So, the two waves of selloffs in the precious metals market five a reason to think. If gold and silver repeat the events of 2011, when the surges to the all-time highs were followed by crashes, the bulls will have problems. After the previous recession, the inflation didn’t accelerate, as the [XAU/USD][3] and [XAG/USD][2] bulls dreamed. Will the inflation rate rise now?

Dynamics of US inflation and silver

![LiteForex: XAG/USD forecast for 07.09.2020][4]

Source : Trading Economics

Despite the population aging, high tech developments, and outsourcing, I still hope that US inflation will grow. The Fed sees the mistakes that the BoJ and the ECB made in the inflation management policies and decided to try targeting the average PCE. The US central bank drives the inflation expectations up, which should increase consumer prices sooner or later. So, precious metals haven’t yet lost the benefits and can well continue to rally up.

I believe the silver price will be growing faster than the gold value. The matter is not only in high investment demand, which is signaled by the growth of the ETF silver holdings by 8,800 tons since early 2020. About 46% of the total silver demand was provided by industry. The industrial sector is recovering after the pandemic faster than the services sector. It is associated with the deferred demand, active buying of industrial products for the funds provided by the financial aid packages. Another reason is that some services are still restricted.

The primary barrier to the silver price rise is the US dollar.

Dynamics of silver and USD

![LiteForex: XAG/USD forecast for 07.09.2020][5]

Source : Trading Economics

The USD bulls are encouraged as the euro is weak because of the ECB verbal interventions, the US jobs market is strong, and Trump’s approval ratings are growing. However, polls show that Trump is still behind other re-elected presidents, except for George Bush and Jimmy Carter.

I believe silver hasn’t yet exhausted its potential. The [XAG/USD][2] bulls will go ahead if US inflation rises, and Joe Biden wins the election in November. In the meanwhile, I think it makes sense to enter longs on the price corrections to the supports at $25.5 and $24.5.

P.S. Did you like my article? Share it in social networks: it will be the best “thank you” :)

Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.

Useful links:

I recommend trying to trade with a reliable broker [here][6]. The system allows you to trade by yourself or copy successful traders from all across the globe.
Use my promo-code BLOG for getting deposit bonus 50% on LiteForex platform. Just enter this code in the appropriate field while [depositing][7] your trading account.
Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders

Price chart of XAGUSD in real time mode

![XAG/USD forecast: Democrats will support silver][8]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

Rate this article:

( {{count}} {{title}} )