Silver Price Daily Forecast – Silver Dives Back Under $17.00

Silver Video 27.05.20.

Gold Downside Puts Pressure On The Precious Metal Segment

Silver is losing ground today as gold declined below $1700 per ounce while the U.S. dollar remained flat against a broad basket of currencies.

The continuing optimism in the stock market put pressure on safe haven assets, and gold is trying to settle below the psychologically important $1700 level. A downside trend in gold will likely impact the whole precious metal segment so silver traders should closely watch the developments on the gold price front.

The U.S. Dollar Index tried to get below the key support level at 99, but this attempt was not successful. The U.S. Dollar Index remains in the range between 99 and 101, and a move out of this range will have a material impact on silver.

Weaker U.S. dollar is bullish for silver as it makes it less expensive for buyers who have other currencies, so a potential U.S. Dollar Index move towards 98 would serve as a bullish catalyst.

Gold/silver ratio failed to settle below the 100 level, putting additional pressure on silver. Before the coronavirus crisis created huge volatility in the precious metal segment, gold/silver ratio was below 90, so a potential return to pre-crisis levels is part of a bullish thesis for silver.

Technical Analysis

Silver failed to settle above the key resistance level at $17.50 and is trying to get below the nearest support level at $17.00. This level has already been tested several times, and a temporary move below $17.00 does not necessarily mean that silver will gain additional downside momentum.

If it happens, silver will fall closer to the next support at pre-crisis levels at $16.50. In addition, the 20 EMA is not far from this support level, so the resulting support area should be rather strong.

In case silver gains more downside momentum, it will likely head towards the 50 EMA below $16.00.

On the upside, the resistance at $17.50 is the main obstacle on silver’s way up. RSI has left the overbought territory, and silver has good chances to gain additional upside momentum if right catalysts emerge. In this scenario, a move above $17.50 will lead to increased upside momentum and take silver closer to the next resistance level at $18.15.

For a look at all of today’s economic events, check out our economic calendar.