Silver Price Daily Forecast – Silver Holds Above $17.00Silver continues its upside move, supported by weaker U.S. dollar and declining gold/silver ratio.
Silver Video 19.05.20.
Silver Continues To Rally As Gold/Silver Ratio Declines
Silver managed to get back above the $17.00 level in continuation of its rally as demand for precious metals stays strong.
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Gold has recently sold off from recent highs but continues to trade firmly above $1700 per ounce which is good for the whole precious metal segment.
The U.S. dollar is losing ground against a broad basket of currencies, and the U.S. Dollar Index has settled closer to 99.5 level. The U.S. Dollar Index stays in the range between 99 and 101, and a move out of this range will lead to increased momentum.
Weaker U.S. dollar is bullish for silver as it makes it cheaper for buyers who have other currencies. If the U.S. Dollar Index moves below 99, investors and traders should expect increased buyer interest in silver and other precious metals.
The equity market is set to take a pause after yesterday’s huge rally but I do not expect major impact on silver since it has a lot of interest in recent days and has the ability to ignore the dynamics of equity markets.
Importantly, the gold/silver ratio has breached the 108 level and has declined closer to 100 in a matter of few days, finally offsetting the majority of losses that were experienced back in March.
In case this trend continues, silver will be set for more upside since the pre-crisis gold/silver ratio was 88. The gold/silver ratio has been in a multi-year uptrend since 2011, and the recent spike above 120 may have marked the ultimate high. If that’s the case, silver will see more support in the coming weeks.
Silver managed to stay above $17.00 and has good chances to test the nearest resistance at $17.50. In case this test is successful, silver may get additional upside momentum and head towards the next resistance level at $18.15.
RSI continues to rise into an overbought territory but the 20 EMA has just crossed the 50 EMA to the upside, signaling that there may be more momentum to come.
On the support side, the first support level for silver is located at pre-crisis levels at $16.50. In case silver settles below this level, it will likely gain downside momentum and head towards April highs at $15.80.