Silver Price Daily Forecast – Silver Falls Towards $27.00Silver declined towards $27.00 amid a major sell-off in the precious metals space.
Silver Video 11.08.20.
A Bad Day For Precious Metals
Silver dropped closer to $27.00 as gold dived below $2000 per ounce and tried to settle below $1950.
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Gold managed to get from $1800 to $2075 without any pullback, so a correction was inevitable. However, the current sell-off is very strong as many traders have apparently decided to take some profits off the table.
Not suprisingly, gold’s sell-off has put pressure on other precious metals. Silver is under serious pressure since gold’s sell-off corresponded with a rebound of gold/silver ratio.
Gold/silver ratio failed to settle below 70 and rebounded above 72. In case this rebound continues, silver will likely decline to lower levels.
Russia’s announcement of the approval of the world’s first COVID-19 vaccine may have served as the catalyst for the sell-off but the main reason for the current weakness in the precious metals space is the previous huge rally which took gold to all-time highs without any meaningful pullback.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is under pressure today. However, the weakness of the American currency did not help gold and silver due to the strength of the sell-off in the precious metals segment.
I’d expect huge volatility in both gold and silver in the upcoming trading sessions as those traders who missed the recent rally will try to establish their positions at lower levels.
Silver gained significant downside momentum and quickly declined from $29.00 to $27.00, ignoring previous support levels.
Currently, silver received support at $26.80, which will likely serve as the first important support level.
In case silver manages to settle below this support level, it will head towards the next support level at $26.20. A move below $26.20 will open the way to the test of the 20 EMA at $24.55.
On the upside, the first significant resistance level for silver is located just below $29.50, followed by resistance at the recent highs at $29.85.
Silver has easily moved between the current support at $26.80 and the nearest significant resistance near $29.50, and it will likely have to consolidate inside this range to develop additional support and resistance levels.
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