Silver Price Daily Forecast – Silver Takes A Break After Recent Upside Move

Silver Video 02.06.20.

Silver Continues To Enjoy Favorable Market Environment

Silver is mostly flat today following the two-day major upside move. The market environment remains supportive for silver price upside as the U.S. dollar is under pressure, the stock market is optimistic while gold trades close to recent highs.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has settled below the 98 level and continues its downside move.

The weaker U.S. dollar is bullish for silver and other precious metals as it makes them more affordable for buyers who have other currencies.

While the demand for the U.S. dollar as a safe haven asset has decreased, gold continues to trade near recent highs as some investors hedge against the potential equity market sell-off.

Gold/silver ratio has settled near the 95 level and has room for further downside in case the market situation continues to stabilize. Before the coronavirus crisis, gold/silver ratio was below 90.

Silver has just made a significant move so it may need some time to consolidate near current levels in order to have a chance for additional upside. At the same time, gold is near highs, and the potential upside move in gold can serve as a bullish catalyst for the whole precious metal segment.

Technical Analysis

Silver managed to settle above the resistance level at $18.15 but met some resistance below $18.50. RSI is close to overbought levels so silver may need to take a pause before it will have a chance to continue its upside move.

The major resistance level for silver is located at $19.00. Silver made a brief excursion above this level back in 2019 but was not able to settle at higher levels. The last time that silver was able to settle above $19.00 for a material period of time was back in 2016.

On the support side, silver should receive minor support near $18.15, while the first material support level is located at $17.50. In case silver manages to settle below $17.50, it will head towards the major support level at $17.00.

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