The late-January dump in silver prices is still looking for a strong support level, despite record inflows into gold and silver.
XAGUSD – Daily Chart
The price of XAGUSD has strong support at the $70.00 level, and it could be tested if recent buying fades.
The high in gold and silver prices accompanied the strongest ever monthly inflow into ETF investments.
For January, gold ETFs attracted $19bn, marking the strongest month on record. January’s net buying, alongside the rise in the physical price, led ETF assets under management to a new record of $669bn. Total global holdings rose by 120 tonnes to 4,145 tonnes, also reaching a new all‑time high.
Record highs can often signal peak interest and a risk of a price peak. All global regions recorded inflows in January. North America and Asia were the drivers of global demand, with the US posting its second‑highest monthly inflow on record and Asia setting a record. European investors also drove record investment while other regions extended their positive momentum.
A stronger US dollar has also hurt the upside in precious metals, as traders returned to dollar assets. The dollar was quiet on Monday, as a holiday in the US dampened recent volume. Wednesday will bring the FOMC meeting minutes, and volatility could get stronger in the second half of the week.
A lower-than-expected US inflation figure lifted expectations of Federal Reserve interest rate cuts last week. Market participants are now expecting a total of 75 basis points in rate cuts this year, with the first one expected in July.
Further hints at rate cuts in the FOMC minutes could be a boost for metals prices.
