Silver Price Daily Forecast – Silver Tries To Hold On To Previous Gains

Silver Tries To Defend The $14.00 Level As Global Markets Turn Red Again

World markets pull back after yesterday’s major rally, which happened despite the very weak U.S. Initial Jobless Claims numbers. The main reason for the current pullback is the worsening situation on the coronavirus front – U.S, Italy, Spain, Germany and other countries have posted material increases in the number of COVID-19 cases.

Gold also pullbacks after several unsuccessful attempts to break through the $1700 resistance level. Meanwhile, the U.S. dollar is gaining ground, which is a negative factor for silver since the metal becomes more expensive for buyers who have other currencies.

Speaking about longer-term perspectives, precious metals including silver should continue to receive support from the zero interest rate environment and rampant money printing by the central banks. In my opinion, this is a very material bullish factor for the segment for at least the next few years

For silver, the main problem is the major role of industrial consumption in the physical demand for the metal. The world recession in 2020 is now guaranteed due to virus containment measures that deal a major blow to economy, so the physical demand for silver is likely to fall unless we see a major boost in investment demand.

However, the investment demand is currently more concentrated in gold. This is the reason why silver typically needs gold to move first to have good chances for a material upside move.

Technical Analysis

The key support level for silver is $14.00. Silver tried to approach it several times, and each attempt was met by increased buying activity. In order for near-term upside momentum to continue, this level should be left intact.

If this level is breached to the downside, silver will likely fall to the next support area at $13.30. A move below $13.30 will signal that the upside momentum for silver is completely busted, and it is ready for another test of the $11.70 – $12.00 area.

On the upside, silver met resistance right below the 20 EMA near $14.75. If silver manages to get above the 20 EMA, it will have good chances to get closer to $16.00, where the 50 EMA is located, return to pre-crisis levels and complete the current rebound.