Silver Price Daily Forecast – Silver Makes Its First Attempt To Rebound

Finally, silver has made an attempt to rebound from the $11.70 – $12.00 area. As I wrote yesterday, the key factor that was putting additional pressure on silver in recent days was the strength of the U.S. dollar. Once the U.S. dollar took a pause, silver had its chance for upside.

After almost reaching the 104 level, the U.S. Dollar Index went into a pullback mode and reached 102. This has allowed other assets, like silver and gold, to gain some ground.

However, the U.S. dollar is not the only factor in play here. The ultimate severity of the coronavirus crisis and the markets’ reaction to changing estimates of the economic damage also play an important role.

Earlier, oil was rallying and the S&P 500 futures were pointing to a solid opening for the U.S. market. However, oil has already given up its gains and slipped into the negative territory, while the U.S. market shows only modest gains.

This means that the risk appetite has not fully returned to the markets despite the announcements of massive aid packages from central banks and governments around the world.

While silver is a safe haven asset, it is not the preferred safe haven asset during the current crisis, so it is also likely to suffer from the pressure put on the general markets.

Technical Analysis

Silver rebound attempt was stopped at $13.03. Currently, the $13.00 level will serve as the nearest major resistance level. If this level is breached and silver is able to close above $13.00, it will be able to try an upside move to the next major resistance at $14.00.

The key support area for silver is still $11.70 – $12.00. A move below this area will put silver prices back to levels not seen since 2008. Back then, silver dropped as low as $8.45, but received material support in the $9.00 – $10.00 area and bounced back to $14.00 in a matter of few months. I’d also note that RSI is leaving the extremely oversold levels, which opens the way for further downside if the market situation continues to worsen.

At this point, silver will surely need some positive news on the economic front that will stop the U.S. dollar upside and provide markets with more risk appetite.