Silver Price Daily Forecast – Silver Tests Resistance At $17.50

Silver Video 16.06.20.

Silver Tries To Continue The Rebound After Yesterday’s Sell-Off

Silver rebounded from the support level at $17.00 but stays below the resistance at $17.50 amid major optimism in the equity market.

The U.S. Federal Reserve has recently promised to buy individual corporate bonds while the recent U.S. Retail Sales report was much better than expected, boosting demand for riskier assets.

Interestingly, the U.S. dollar is flat against a broad basket of currencies, and the U.S. Dollar Index has settled close to the 97 level. In case the U.S. dollar continues its rebound after sell-off, silver may experience additional pressure as stronger dollar makes it more expensive for buyers who have other currencies.

Despite the strong risk-on mode in the markets, gold continues to receive support from those investors who want to hedge against a potential market downturn. Also, the expansion of the Fed stimulus provides additional support to gold.

Gold stays above the key $1700 level which is good for the whole precious metal segment but it is not yet ready to get above $1750 and start a new upside move.

Gold/silver ratio has recently tried to settle above 100 but fell below this level. It will be interesting to see whether the recent upside move in gold/silver ratio will continue. In this scenario, there’ll be more pressure on silver.

However, I maintain my view that a normalization of the market situation could push gold/silver ratio back to pre-crisis levels below 90, which will be a very bullish development for silver.

Technical Analysis

The recent sell-off was met at the major support level at $17.00, and silver quickly rebounded closer to $17.50. Now, silver will have to settle above the resistance at $17.50 to have a chance to continue the upside trend.

From a big picture point of view, the upside trend in silver is still intact, and silver will need to get below $17.00 to start a downside trend.

If this happens, silver will head towards the next support area between the pre-crisis level at $16.50 and the 50 EMA at $16.70.

On the upside, a move above $17.50 will open the way to the test of the next resistance level below $18.50, although silver may face some resistance near $18.15.

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