Silver Price Daily Forecast – Silver Breaks Above $19.50
Silver Video 20.07.20.
Gold/Silver Ratio Continues Its Downside Move
Silver managed to get above the resistance level at $19.50 and continues its upside move as gold is testing yearly highs while the U.S. dollar is flat against a broad basket of currencies.
The key topics of the day are the ongoing negotiations about the EU recovery fund and the upcoming Phase 1 trial results of COVID-19 vaccine made by AstraZeneca.
The currency market is undecided about what to expect, and the U.S. Dollar Index is mostly flat after testing multi-month lows. However, the downside trend of the U.S. dollar is still intact, which is bullish for precious metals including silver.
Meanwhile, gold tries to break to new highs as it is supported by uncertainty about economic recovery and continued money-printing from the world central banks.
Gold’s upside move attracts investment into the whole precious metal segment and is bullish for silver.
Gold/silver ratio broke to multi-month lows near the 92 level. The downside in gold/silver ratio continues, and pre-pandemic levels below 90 are now in sight.
Gold/silver ratio’s return to pre-pandemic levels has always been a material component of the bullish thesis for silver. I maintain my view that gold/silver ratio has very good chances to get back below 90 and settle at these levels.
Silver gained additional upside momentum above the resistance level at $19.50 and continues to move higher. The nearest resistance level for silver is located at $20.00.
A move above $20.00 will be a very significant development for silver as it has not traded that high since 2016. In case silver manages to settle above this resistance level, it will have a chance to get to the test of 2016 highs at $21.15.
On the support side, the previous resistance at $19.50 will likely serve as the first support level for silver. If silver settles below $19.50, it will head towards the next support level at $19.00.
I’d expect that silver will receive material support at $19.00 as those traders who did not believe in the first breakout will try to establish their positions. A move below $19.00 will be very problematic for silver’s near-term upside momentum.
For a look at all of today’s economic events, check out our economic calendar.