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Silver Price Daily Forecast – Silver Gets Above Resistance At $28.50

By:
Vladimir Zernov
Published: Sep 1, 2020, 13:44 UTC

Silver gained significant upside momentum and managed to settle above $28.50.

Silver

Silver Video 01.09.20.

Gold/Silver Ratio Declines To New Lows

Silver managed to settle above the resistance level at $28.50 and continues its upside move as the U.S. dollar remains under serious pressure against a broad basket of currencies.

The U.S. Dollar Index declined below the 92 level and gained more downside momentum. Weak inflation data from Euro Area did not manage to provide any support to the American currency which is bullish for all precious metals including silver.

Not surprisingly, gold also benefits from U.S. dollar weakness. Spot gold has firmly settled above the 20 EMA at $1950 and is currently trying to get to the test of the $2000 level.

A move above this psychologically important level will likely lead to increased upside momentum and provide support to other precious metals, including silver.

Meanwhile, gold/silver ratio has declined to new lows. Gold/silver ratio managed to get below the August lows at 69.50 and continues its downside move. Gold/silver ratio’s RSI is at moderate levels so there is plenty of room to gain more downside momentum.

At this point, the setup is favorable for silver. The U.S. dollar remains under significant pressure while gold/silver ratio is declining to lows not seen from 2017. In this environment, silver maintains solid chances to test multi-year highs at $29.85.

Technical Analysis

silver september 1 2020

Silver breached the resistance at $28.50 and continues its upside move. Despite the strength of the recent upside move, RSI is still in the moderate territory so silver has plenty of room to gain more momentum in case the U.S. dollar continues to lose ground against a broad basket of currencies.

The next material resistance level for silver is located at multi-year highs at $29.85. There are no important levels between $28.50 and $29.85 so silver may quickly get to the test of multi-year highs in case it gains sufficient upside momentum.

On the support side, the previous resistance at $28.50 will likely serve as the first material support level for silver. In case silver manages to settle below $28.50, it will head towards the next important support level at $27.75.

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

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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