Silver will drop to 31.7 amid de-escalation of US-China relations

Silver started trading on Monday, May 19, with a small gap of 59 points above Friday's closing price. Within a few hours, the quotes managed to grow by 0.76% (245 pips) and almost completely return to the opening price, without closing the gap at the time of writing. Several previous daily candles do not show a particular direction, although the trend lines allow tracing some tendency towards a decline in prices of the trading instrument.

On the daily timeframe, the Moving Average Convergence/Divergence indicator (MACD) has lost any momentum, touching the zero line. This indicates a strong slowdown in price movement without taking any clear direction. The 4-hour MACD is deep in the negative zone, confirming the downward trend in the short term while showing a gradual weakening of selling momentum in silver.

The Relative Strength Index RSI on the daily timeframe is equal to 42. It has been staying near the key level of 50 during the whole of May, showing the absence of a certain direction of price movement. The four-hour RSI has a value of 50 and is just as indifferent to both directions of quotations movement. This change speaks about stable flatness of silver.

Demand for safe-haven assets, including silver, weakened amid signs of easing global trade tensions between the US and China. Recently, the two countries reached a temporary agreement to significantly reduce tariffs. The breakthrough is seen as a positive step towards de-escalation of trade frictions between the two economies.

Meanwhile, silver's decline may be limited by a weakening US dollar amid economic data, strengthening expectations of potential Federal Reserve rate cuts this year. Lower US interest rates tend to support silver prices.

Trading strategy option: sell at the current price with Take Profit at 31,7 and Stop Loss at 33.