Silver Price Forecast – Silver Confirms Strength that Points to Higher Prices
Silver showed new strength on Tuesday as it advanced above a minor swing high of $17.87. That was the next price point to watch where silver could see some resistance. It did not, and therefore the move gives a new sign that silver is getting stronger following the breakout of a descending wedge pattern last Friday.
Currently, silver is up 0.16 or 0.91% to $17.92.
Apple Miss Adds Uncertainty
Uncertainty raised by a report that Apple Inc. would miss quarterly sales forecasts worried investors as it shows a direct impact on fundamentals of a leading global technology company due to the coronavirus outbreak.
This leads to questions as to how other leaders are going to be negatively impacted and to what degree. Even though gold many times benefits from increased uncertainty in the global economy and markets, silver can also benefit.
Meanwhile, the U.S. dollar index once again reached a new trend high, even as silver rose. This is another sign of strength for silver as a higher dollar will frequently put downward pressure on precious metals and other commodities.
Meanwhile, the Euro, which has been falling against the dollar for the past 12 days dropped again.
Significance of Channel Breakout
Given the breakout of a relatively well constructed descending trend channel silver has the potential to rise above $18 and keep going. The breakout of the channel is the first sign that the larger uptrend may be kicking in.
Back in late December silver broke out of a large bullish descending wedge trend continuation pattern and took off from there before hitting a high of $18.84. That high is now the top of the descending trend channel.
The high to low swing ($16.51 to $18.84) of the wedge breakout rally saw silver advance by 14.12%.
It is not unusual to see a degree of symmetry in price swings in markets. If the current advance in price ends up matching the prior advance, then silver would reach $19.481. That target is derived by starting with the low of the channel at $17.07.
Price Levels to Watch on the Way Up
Other price levels to watch on the way up include the prior swing highs of $18.08 and $18.33. Silver could see resistance or breakthrough, providing a new sign of strength.