Silver Price Prediction – Prices Rebound and Recover Support but Momentum is Negative

Silver prices rebounded after taking out Tuesday’s low and close above support levels. This followed a fed decision where interest rates were kept unchanged. The initial downdraft came as the dollar continued to rally against most major currencies. Generally, a stronger dollar is negative for silver prices. US yields moved lower on Wednesday’s following a softer than expected US pending home sales report. Pending home sales, which measure signed contracts, dropped 4.9% in December compared with November. PV solar sales surged higher during the Q3 of 2019, placing a tailwind behind silver demand.

Technicals

Silver prices rebounded from session lows and were able to close up on the session, recovering support near the 50-day moving average near 17.45. Resistance is seen near the 20-day moving average at 17.95. Prices have been sliding since hitting a high in September of 2019 above 19 dollars per ounce. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. It appears that the fast stochastic is headed back to oversold territory. The current reading of 19, is just below the oversold trigger level of 20 and could foreshadow a correction. Medium-term momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices. The RSI is flat and consolidating which means that prices will likely chop higher and then consolidate in a relatively tight range.

US PV Market Rises

The residential solar market reached record highs in the Q3 of 2019 with 712 megawatts of solar installed, according to the latest U.S. Solar Market Insight report from Wood Mackenzie Power & Renewables and the Solar Energy Industries Association. The U.S. solar market added 2.6 gigawatts of solar photovoltaics in the third quarter, swelling total U.S. solar capacity to 71.3 gigawatts.