Silver Price Daily Forecast – Silver Continues Its Upside MoveSilver tests the $17.50 level but news about a potential vaccine for COVID-19 cause a sell-off.
Silver Video 18.05.20.
Silver Enjoys Upside Together With Gold
Silver continued its rally after it reached pre-crisis levels at $16.50 and even traded above $17.50 at one point. However, the recent news about progress on the coronavirus vaccine front led to a sell-off in the precious metal segment.
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Gold was leading the sector to the upside as it reached new highs on a spot basis. Just like silver, gold experienced a sell-off following the vaccine news but stays above $1750 per ounce.
As I previously noted, gold price upside is bullish for silver as it attracts new money into the whole precious metal segment.
The U.S. dollar dynamics are also supportive for silver today as the American currency is losing ground against a broad basket of currencies. The U.S. Dollar Index is declining but stays above the 100 level and remains in the range between 99 and 101.
A weaker U.S. dollar is bullish for silver and other precious metals as it makes them more attractive for buyers who have other currencies.
The market has recently been undecided about the fate of the American currency, and a safe-haven role of the precious metal sector increased.
This development is highlighted by silver’s and gold’s reaction to positive news about a potential vaccine – a sell-off means that market participants have bought them to increase their exposure to safe haven assets.
Silver managed to settle above pre-crisis levels at $16.50 and continued to rally. At one point, silver even got above $17.50 but the news about a potential vaccine for coronavirus have caused a major sell-off in precious metals, and silver returned back below $17.00.
At this point, the $17.50 level will serve as the first major resistance for silver. In case silver manages to get above this level, it will head towards the next resistance level at $18.15.
I’d note that RSI starts to get into an overbought territory so silver will likely face increased resistance in the upcoming trading sessions.
On the support side, the previous resistance level at $16.50 is the first material support level for silver. If silver gets below this level, it will likely head towards the next support level at $15.80.