Silver Price Daily Forecast – Silver Is Flat Despite Broad Market Sell-OffSilver stays at key support level despite stronger U.S. dollar and weaker stocks.
Silver Clings To The $14.00 Level
Silver continues to trade near the $14.00 level despite the sell-off in the world markets and strength of the U.S. dollar.
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The world markets are in the red zone today as coronavirus continues to spread actively. To beat the virus, countries could have to implement lengthy containment measures which are very bad for economy.
U.S. dollar, which currently serves as the safe haven asset of last resort, is gaining ground. U.S. Dollar Index is once again trying to get above the psychologically important 100 level.
Gold is mostly flat, just like silver. Silver is definitely showing strength since weak markets and strong U.S. dollar are bearish factors, especially given the fact that silver demand is dependent on industrial demand.
It remains to be seen whether the current downside in the world markets can turn into real panic. In this case, it could be hard for silver to stay at current levels since it has not served as a safe haven asset during the current crisis.
At the same time, the current market action in silver suggests presence of underlying buying interest. In more favorable conditions, such buying interest could lead to further upside in silver prices.
At this point, it looks like the next few trading sessions will be very important for silver since they will decide whether silver can hang on to the $14.00 level or it will lose the upside momentum and start falling towards the previous lows.
Silver stays at the key $14.00 level. I’d note that silver has several times experienced increased buyer interest in the $13.80 – $13.90 area, so it looks like a move below $13.80 would be a decisive downside breakout.
If this happens, silver could quickly find itself at the next support level at $13.30. As I’ve written before, many traders have had the time to accumulate their positions near the $14.00 level, and their protective stops are likely placed below $13.80.
Thus, a move below this level could trigger a chain reaction and lead to additional downside in silver.
On the upside, the area near the 20 EMA at $14.60 is the main resistance level. If silver manages to get past this important level, it would be able to head towards the 50 EMA closer to $16.00.