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Vladimir Zernov

Silver Video 27.04.20.


Silver Stays Range-Bound While Volatility Decreases

Silver continues to trade between the 20 EMA at $15.10 and the 50 EMA at $15.50 despite the renewed optimism in the global markets and the weakness of the U.S. dollar.

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Markets are mostly in a good mood today as many economies have started to lift certain virus containment measures. Among major assets, only WTI oil is experiencing a major sell-off due to storage concerns.

Meanwhile, the U.S. Dollar Index has settled below the 100 level as traders favor riskier currencies. Weaker U.S. dollar is a bullish catalyst for silver but today this weakness does not provide much help.

Gold fails to continue the recent upside move but still stays above $1700 per ounce, which is a positive factor for all precious metals. Interestingly, a combination of stronger equity markets and weaker dollar, which has frequently helped gold during the current crisis, is also failing to provide additional upside.

At this point, it looks like silver is going through a period of stabilization following the rapid moves of the recent weeks. I should note that neither the equity market upside nor the U.S. dollar weakness is overwhelming, making it easier for silver to ignore these catalysts.

Technical Analysis

While silver continues to trade in a range between the 20 EMA and the 50 EMA, this range narrows, and it is likely that we’ll see a breakout soon. At this point, silver’s trend is to the upside, and the recent pullback was quickly bought by traders who wanted to increase their exposure to silver.

The nearest resistance level is located at the 50 EMA at $15.50. In case silver manages to settle above this level, it will head towards the test of the recent highs at $15.80. A successful test of this level will open the way to pre-crisis levels at $16.50.

On the support side, the 20 EMA at $15.10 is the first support level for silver. I’d expect some additional support in the $14.90 – $15.00 area, and I think that it won’t be that easy for silver to settle below $15.00.

In case this happens, the next major support level is located at $14.60. In case silver manages to get below this level, the current upside trend will come to an end and silver could experience increased downside momentum.

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