Silver Price dives below $50.00 as the Dollar rallies

• Silver extended losses on risk aversion, reaching two-week lows at $49.20.

• Hopes of a de-escalation of the US-China trade rift have boosted risk appetite, hammering precious metals.

• XAG/USD has broken the neckline of a bearish H&S pattern, targeting levels right above $46.00.

Silver is finally correcting lower. Market expectations that the US and China will de-escalate trade tensions are boosting the US Dollar’s recovery and hurting precious metals. Silver has extended its reversal from last week's highs at the $55.00 area, to session lows near $49.00 so far.

US President Trump soothed markets on Monday, announcing that he was planning to meet his Chinese counterpart Xi Jinping next week, and that he expected to reach a “fair deal” which would lead to a good trade relationship between the two countries. These comments tackled fears of a trade war and have sent the US Dollar rallying across the board.

Technical analysis: A bearish H&S pattern is in play

Silver has broken below the base of the ascending channel from mid-September lows and extended losses below the neckline of a bearish Head & Shoulders, a common figure in trend shifts, at the $50.71 area.

The pair is attempting to return above the $50.00 psychological level at the time of writing, and is likely to retest the mentioned H&S neckline, which might act as a resistance now, at the 50.80 area. Further up, the target would be the reverse trendline, near 52.10.

To the downside, intra-day lows are at $49.20 ahead of the October 9 low, at $48.45. The H&S pattern’s measured target is coincident with the 61.8% Fibonacci retracement of the September-October rally, at $46.15.