Silver Price Daily Forecast – Support At $17.50 Stays StrongSilver has temporarily slipped below $17.50 but quickly returned above this material support level.
Silver Video 12.06.20.
Yesterday’s Global Market Sell-Off Pushed Silver Closer To The Support Level At $17.50
Silver fell below $18.00 but managed to stay above $17.50 as recent market downside put some pressure on silver while gold/silver ratio increased.
Yesterday, S&P 500 was down almost 6%, and this major sell-off caused weakness in silver as industrial demand is a major component of total demand for silver.
Today, the equity market is gaining ground while gold looks ready to test the $1750 level. In these circumstances, silver managed to stay above the important support at $17.50.
Gold is looking strong due to Fed’s dovish commentary and fears about a second wave of coronavirus. Gold’s move above $1750 will likely provide support to the whole precious metal segment.
Gold/silver ratio continues to rebound. Currently, it has settled near 98.5. Before the coronavirus crisis, gold/silver ratio was below 90. At the peak of the crisis, gold/silver ratio was as high as 126. A return to pre-crisis levels is a material potential catalyst for silver upside, and I maintain my view that such a move is possible.
U.S. dollar is flat against a broad basket of currencies today, and the U.S. Dollar Index has settled near 97. It remains to be seen whether the dovish commentary from the Fed will lead to additional downside for the American currency. If this happens, silver will get more support as cheaper U.S. dollar makes silver more attractive for buyers who have other currencies.
Silver has once again tested the support level at $17.50. While silver was able to temporary dip below this level, buyer interest immediately emerged and silver is back above this key level.
In addition, the 20 EMA is at $17.30, providing additional support to silver. In my opinion, silver will need strong catalysts to settle below $17.50.
If this happens, silver will likely gain material downside momentum and head towards the next support level at $17.00.
On the upside, the nearest resistance for silver is at recent highs below $18.50, although there’s also some resistance near $18.15. A move above $18.50 will open the way to the test of the major resistance level at $19.00.
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