Silver Price Daily Forecast – Silver Falls Due To Broad Market Sell-Off

Silver Video 21.04.20.

Unprecedented Downside In The Oil Market Puts Pressure On Many Asset Classes

Silver breached the 20 EMA level near $15.00 and fell to the next support at $14.60 amid a broad sell-off in the world markets.

This sell-off was triggered by the historic sell-off in the oil market – WTI contract for May 2020 fell below zero on Monday. The trading has shifted to the June 2020 contract but the sell-off continues.

In this situation, all riskier assets found themselves under pressure while demand for safe haven assets increased. The primary beneficiaries of the sell-off are the U.S. dollar and the U.S. Treasuries which serve as primary safe haven assets during the current crisis.

Precious metals have not enjoyed this status during the coronavirus pandemic, although gold benefited from huge monetary stimulus announced by governments and central banks.

However, at times of a broad sell-off, gold also finds itself under pressure. In this environment, it is not surprising that silver is also losing ground.

In addition to the sell-off in the equity markets, the strength of the U.S. dollar puts more pressure on precious metals as it makes them more expensive for buyers who have other currencies.

The U.S. Dollar Index has firmly settled above the psychologically important 100 level and continues its upside move. Recently, forex volatility decreased, but unprecedented moves on the oil price front can bring more volatility to the world markets.

Technical Analysis

Silver prices breached the 20 EMA at $15.00 to the downside and left the $15.00 – $15.60 trading range. The 20 EMA level was an important support level for silver so it’s not surprising that silver has developed material downside momentum once it was able to settle below $15.00.

Currently, silver is trading at another material support level at $14.60. Previously, this level has served as resistance for silver on its way up, and there was a lot of interest in this area.

In case silver is able to settle below $14.60, it will likely gain additional downside momentum and head towards the next support area at $13.80- $14.00.

The nearest resistance level for silver is currently located at the 20 EMA at $15.00. If silver is able to return above the 20 EMA, it will again trade in the range between the 20 EMA and the 50 EMA before being able to make the next move.