Silver Price Daily Forecast – The Sell-Off Continues
For silver, the selling pressure that was present in the previous trading session continues today. Previously, I wrote that the market should calm down before silver will have a chance for sustainable upside and noted that traders should not blindly count on support levels to provide much help in the coming days.
This is exactly what is happening right now since silver is at lows not seen since late 2015. Gold is feeling a bit better but also suffers from a major sell-off. While the precious metals typically serve as safe haven assets, the current market panic led to a buying spree in just a handful of assets like the U.S. dollar or the U.S. Treasuries, which are perceived as the ultimate safe havens.
With no good news on the coronavirus front, it’s hard to expect that the market will be able to materially change its mood in the upcoming days. While the initial sell-off in silver was likely triggered by those investors who were raising cash to support their positions elsewhere, the current downside originates from the breach of the major technical support around the $14.00 level. It looks like many traders and investors were caught off-guard by the severity of the downturn in silver and are liquidating their positions.
Silver has breached all previous support levels and is trying to find the level at which investors will be ready to initiate new long positions. At this point, there is some minor support around the $12.00 level. If this support is breached, silver may continue to move even lower.
The minor rebound attempt for silver was stopped at $13.30 which now serves as resistance. Silver will have to breach this resistance level to have a chance to rise up to $14.00 where it will likely meet heavy selling pressure by those investors who failed to exit their positions at the moment when silver was breaching this level for the first time.
The upcoming sessions will likely be very volatile because there are no established technical levels after such a rapid sell-off. Thus, traders will have to act fast in order not to miss any major move in silver.