Strong dollar and rising yields put pressure on money ETF
Silver attempts to stabilize below the support level at $ 22.75 as the US Dollar gains ground against a large basket of currencies. Meanwhile, iShares Silver Trust is trying to get below the $ 21.00 level.
The US dollar index recently managed to get back above the 96 level. In case the US dollar index gains further bullish momentum, it will head to the resistance at 96.25 which will be bearish for prices of. silver and gold today. A strong dollar is bearish for precious metals because it makes them more expensive for buyers who have other currencies.
Gold fell below the support level at $ 1,815 and attempted to test the next support at $ 1,800 while SPDR Gold Trust fell below the $ 169 level. If gold drops back below the $ 1,800 level, it will gain additional bearish momentum and head towards the $ 1,775 level which will be bearish for silver.
The gold / silver ratio has recently managed to stabilize above the 79 level and is trying to break above 79.50. If this attempt is successful, the gold / silver ratio will move towards the 80 level which will be bearish for silver.
It should be noted that Treasury bond yields took on a strong bullish momentum at the start of the year. The yield on 2-year Treasuries fell from 0.74% to 0.80%, providing support to the US dollar and putting pressure on precious metals.
Silver has fallen below the support level at $ 22.90 and is testing the next support at $ 22.75. A move below this level will push the silver towards the next support at $ 22.60.
If the silver manages to get back below $ 22.60, it will head towards the support at $ 22.30. A break below this level will pave the way for testing the support at $ 22.10.
On the upside, the previous support at $ 22.90 will serve as the first level of resistance for silver. If silver moves above this level, it will head towards resistance at the 50 EMA which sits near $ 23.15. A successful test of this resistance level will pave the way for the resistance test at $ 23.50.
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This article originally appeared on FX Empire
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