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Vladimir Zernov

Silver Video 16.02.21.

Stronger Dollar Puts Additional Pressure On Silver

Silver found itself under strong pressure as Treasury yields increased while the U.S. dollar gained ground agains a broad basket of currencies.

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The U.S. Dollar Index has recently made an attempt to settle below the support at 90.30 and even managed to get to 90.12. However, it has quickly reversed course and is currently trying to settle above the resistance at the 20 EMA at 90.60. If this attempt is successful, the U.S. Dollar Index will head towards the 50 EMA at 90.75 which will be bearish for silver and gold price today.

The yield of 30-year Treasuries reached the 2.07% level amid global market optimism. Higher yields put pressure on silver and gold which provide no yield. If Treasury yields continue to increase, silver and gold will likely move lower in the near term.

Gold is currently trying to get to the test of the support at $1785. If gold manages to settle below this level, it will move towards the next support at $1775 which will be bearish for silver and other precious metals.

Gold/silver ratio managed to get back above the 66 level but failed to gain significant upside momentum. The potential rebound of gold/silver ratio is a material risk for silver bulls as gold/silver ratio is located at levels that were last seen back in 2016 and it remains to be seen whether it will be able to settle at these levels for the longer term.

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Technical Analysis

Silver gained strong downside momentum and is testing the support level at $27.00. If silver manages to settle below this level, it will move towards the next support which is located at the 20 EMA at $26.75.

In case silver declines below the 20 EMA, it will continue its downside move and head towards the next support at $26.30. A move below this level will open the way to the test of the support at the 50 EMA at $26.05.

On the upside, the nearest material resistance level for silver is located at $27.50. No important levels were formed between $27.00 and $27.50 so silver moves quickly within this range. If silver manages to settle above the resistance at $27.50, it will have another chance to test the next resistance level at $27.75.

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

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