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Silver Price Daily Forecast – Silver Corrects After Yesterday’s Major Upside Move

Silver prices lose some ground as world markets try to evaluate the ultimate economic impact of virus containment measures.
Vladimir Zernov

Silver Pullbacks As Markets Lose Some Of Yesterday’s Risk Appetite

Silver price corrects following yesterday’s strong move. The world markets have had a major upside move thanks to U.S. Federal Reserve quantitative easing program and the upcoming U.S. coronavirus aid package, but now the attention shifts to real-world medical and economic data.

The pullback in silver happens despite the continued weakness of the U.S. dollar. Several days ago, the U.S. Dollar Index failed to get past the 104 level, and has already corrected below the 102 level.

Gold is under pressure as well following the unsuccessful test of the $1700 level. During the current crisis, gold has been the preferred safe haven asset while silver could hope to be a catch-up play.

The U.S. stocks have started to lose momentum following yesterday’s big move, and the loss of risk appetite may put additional pressure on silver. Interestingly, the recent data on U.S. Durable Goods Orders was unexpectedly positive, but it remains to be seen whether the data for February will be able to provide additional support for the markets and increase investors’ risk appetite.

Data on U.S. Initial Jobless Claims, which is set to be published on Thursday, will likely have a major impact on most markets, so traders will have to watch it closely.

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Technical Analysis

Following the major upside move that took silver from under $12 closer to $15, the precious metal will try to settle above the $14.00 level. In order to do this, silver will likely need some weakness on the U.S. dollar front and some optimism in gold.

Also, the general risk appetite in the world markets is important because currently silver does not serve as the primary safe haven asset, so it will likely suffer if the world markets go back into the sell-off mode.

If the $14.00 level holds, silver will be able to test the 20 EMA at $14.85, just above recent highs. In case silver breaches the $14.00 level to the downside, there’s little support until the $13.00 – $13.30 area.

This will be a crucial area for silver to hold as movement below $13.00 will signal that silver is ready to continue the previous downside trend, and that the current rebound was simply a bear market rally. In such a case, the $11.70 – $12.00 range still serves as the ultimate support for silver.

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