Silver Tests Resistance At $20.50 As Big Rally Continues

Key Insights

• Silver rallied as gold/silver ratio declined to 83.
• Other precious metals also enjoyed strong support today. 
• WTI oil moved towards the $83 level as OPEC+ plans to cut oil production by more than 1 million bpd.

Silver Gains More Than 7% As Gold/Silver Ratio Declines To Multi-Month Lows

Silver gained strong upside momentum and settled above the $20.00 level amid a broad rally in commodity markets. Gold/silver ratio declined towards the 83 level, providing significant support to silver.

Currently, silver is trying to get above the resistance at $20.50. In case this attempt is successful, silver will move towards the next resistance level, which is located at $20.80. A move above the resistance at $20.80 will open the way to the test of the $21 level. If silver manages to settle above this level, it will head towards the next resistance at $21.35.

On the support side, the nearest support level for silver is located at $20.30. If silver declines below this level, it will move towards the next support at $20.00. A successful test of the support at $20.00 will push silver towards the support at $19.80.

Other precious metals also enjoyed strong demand today. Platinum managed to get back above the $900 level, while palladium tested the $2250 level.

Meanwhile, gold settled above the resistance at $1675 and tested the next resistance level at $1690.

The rapid decline in Treasury yields served as the key driver for today’s moves. Weaker dollar also provided material support to precious metals. In addition, it looks that there was some pent-up demand for precious metals, which was realized today.

WTI Oil Rallies As Traders Wait For OPEC+ Cuts

WTI oil moved towards the $83 level as traders reacted to OPEC+ plans to cut oil production by more than 1 million bpd.

OPEC+ is worried that the slowdown of the world economy will cut demand for oil and push prices below the $80 level. Saudi Arabia is ready to act, which is bullish for oil markets.

However, it remains to be seen whether production cuts will be sufficient to change the current trend in the oil markets.

Natural Gas Remains Under Strong Pressure

Natural gas declined below the support at $6.55 and is testing the next support level at $6.30 as demand remains weak due to cooler weather and damage from Hurricane Ian.

Traders believe that the next EIA report will show that working gas in storage continues to increase at a robust pace. The fundamental situation is bearish, and it looks that natural gas has a chance to get to the test of summer lows at $5.35 in the next few weeks.

Copper Continues To Trade Near The $3.40 Level

Copper  remains stuck near $3.40 despite global market optimism. Copper traders remain focused on the slowdown of the world economy, which will reduce demand for copper.

Today’s market action indicates that copper does not have enough buyers at current levels. In case global market pull back in the upcoming trading sessions, copper may move towards the recent lows near $3.25.

For a look at all of today’s economic events, check out our economic calendar.