FX.co ★ XAG/USD, SILVER

Silver price (XAG/USD) rockets by nearly 4% to around $51.97 in the European session on Wednesday. White metal shoots up after midterm election results in the United States (US), where Democrats won a majority of seats in both houses of Congress. The Democrats' victory has increased worries about the continuity of existing policies, including Artificial Intelligence (AI) spending by US President Donald Trump's administration, which has led to a marked increase in the value of safe-haven commodities like silver. Nonetheless, this uncertainty will continue to keep the US Dollar (USD) weak. Analysts from Commerzbank note that "US equities, and the more tech-heavy Nasdaq in particular, are likely to come under pressure" amid the election. In their opinion, the recent strength of the Dollar has been directly related to "enthusiasm surrounding US equities and the resulting capital inflows." Moreover, they say that any negative news about US stocks might mean that "Dollar weakness could therefore become somewhat more entrenched over the coming hours." Analysts at Commerzbank say that "if investment starts losing momentum, markets could begin pricing in a weaker phase of US growth, which would weigh on the Dollar," meaning the latest decline in the currency's rate might continue as growth expectations shift. Next, the US Nonfarm Payrolls (NFP) figures for October will be announced on Friday and could influence silver. These figures are expected to influence Fed interest-rate expectations. Currently, the probability of a rate hike to 4.25% is extremely high, based on the Fed's CME FedWatch tool. Later today, investors will watch the ADP Employment and October ISM PMI figures. On the daily chart, XAG/USD is trading at $51.97 and has maintained its bearish short-term bias, as it trades below the 20-day Exponential Moving Average (EMA) at $54.83. The metal's inability to return to this short-term trend indicator signals bearish pressure. In contrast, an RSI of 36.69 shows weak momentum that has bounced from oversold levels but lacks bullish bias. To the upside, the first resistance is the 20-day EMA at $54.83, and a breach is needed to relieve the prevailing bearish bias. To the downside, the 11-month low at $48.62 is the major support level, and a break below it will pave the way for more downside toward $45.