Silver Price Daily Forecast – Boosted By Weaker U.S. Dollar, Silver Continues Its Upside MoveSilver maintains positive momentum and tries to get closer to April highs at $15.80.
Silver Video 12.05.20.
Silver Holds Above The 50 EMA At $15.40
Silver continues to trade above the 50 EMA level at $15.40 while the U.S. dollar loses ground against a broad basket of currencies and equity markets cheer the Fed’s decision to buy bond ETFs and the encouraging comments about potential COVID-19 treatments.
The U.S. Dollar Index is back below the 100 level as investors increased purchases of riskier assets and dumped safe haven assets like the U.S. dollar. The weakness of the American currency is bullish for silver as it makes it cheaper for buyers who have other currencies.
Meanwhile, gold stays above $1700 per ounce which is a supportive catalyst for the whole precious metal segment. Gold volatility has decreased in recent days as it tries to stabilize above the key $1700 level.
Typically, precious metals are considered to be a way to protect investors from the negative effects of inflation. However, these are unprecedented times, and precious metals may gain ground on deflation data because it signals that central banks will have to continue their quantitative easing programs to support the markets and the economy.
Slowly but surely, silver gets closer to the next resistance level near April highs at $15.80. This time, silver will have a much better chance to successfully test this level.
In case silver manages to settle above $15.80, it will likely gain additional upside momentum and head towards pre-crisis levels at $16.50, completing the rebound from mid-March lows.
On the support side, the nearest support for silver is at the 50 EMA at $15.40. The spread between the 50 EMA and the 20 EMA has narrowed, and I do not expect that the 20 EMA will serve as a separate support level.
In case silver goes below the 50 EMA, it will head towards $15.00. The main support area for silver is located above $14.60. This is the level that should not be breached for silver to continue its rebound. If silver settles below $14.60, a robust downside momentum may develop and take silver closer to the next support area at $14.00.