Silver Weekly Forecast – XAG/USD Battles $70 Barrier as Stealth QE Hopes Rise

Silver

The silver market initially pulled back a bit during the week but then rallied enough to reach towards the $70 level again. $70 is a large, round, psychologically significant figure that people will be paying close attention to, as they typically do. But it’s also an area where we had seen quite a bit of support previously. So now the rubber meets the road, as it were, and we will have to see whether or not silver can continue to jump from here as the level is one I am watching closely.

Technical Resistance and Macro Drivers

The US dollar has an inverse correlation to silver most of the time, so it does make a certain amount of sense that we would be watching the greenback at the same time, but also interest rates, because they’re all tied together, obviously, and this could continue to be the story going forward.

Silver’s a little bit different than gold in this type of environment. Gold had at one point in time been falling to interest rates as well, but it now appears that the safety trade is starting to come back into vogue, as well as punishing the US for bond buybacks. We’ll see if that same thing plays through here in silver, as the two assets can heavily influence each other from time to time.

So far it has, but in all fairness, since that announcement, this is the first real challenge of significant technical resistance. It does look bullish, but $70, more likely than not, will end up being important, so I’ll be watching that level for some kind of confirmation, be it bullish or bearish.