Silver Price Daily Forecast – Silver Corrects From Recent Highs

Silver Video 15.04.20.

Stronger U.S. Dollar Puts Pressure On Silver

Silver prices pull back following the previous upside move as investors rush to safe haven assets like the U.S. dollar amid economic concerns.

The U.S. Dollar Index, which started the day below the 99 level, is already testing the 100 level. The strength of the U.S. dollar is bearish for silver and other precious metals since it makes them more expensive for buyers who have other currencies.

The U.S. stock market was pointing to a negative open as investors got concerned with the real-life economic impact of virus containment measures. The U.S. Retail Sales data for March, which showed the Retail Sales declined by as much as 8.7%, put additional pressure on riskier assets.

Silver does not play a role of a safe haven asset of last resort during the current crisis so it is vulnerable to major shifts in investor sentiment. The strength of the U.S. dollar, which accompanies broader sell-offs in various asset classes, puts additional pressure.

I’d also note that both silver and gold made major moves in recent days so some  profit taking is possible. It remains to be seen whether the precious metal segment will be able to withstand a broader market sell-off, or the U.S. dollar and the U.S. Treasuries will remain the uncontested safe haven assets.

Technical Analysis

Silver did not manage to stay above the 50 EMA at $15.65 and pulled back. However, silver saw increased buying interest at a minor support level at $15.35. In case this support level is breached to the downside, silver prices will head towards the next support at the 20 EMA near the $15.00 level.

The 20 EMA level should provide significant support for silver since it has already been tested several times and proved its strength.

The nearest minor resistance level is located near recent highs at $15.80. In case silver manages to settle above this level, it will head towards pre-crisis levels at $16.50.

Currently, silver continues to trend up in a tight upside channel, and the minor pullback does not change the big picture. The near-term silver price dynamics will depend on the strength of the U.S. dollar and the breadth of the equity market pullback.