Silver Price Daily Forecast – Silver Rises on Broad Market Optimism


Rising Stock Market and Weakening US Dollar Help Silver to New Highs

After a slight pullback yesterday, silver continues to move higher, helped by broad optimism in global markets. Investors are focused on early signs that major economies will begin to reopen and favor riskier assets.

Unsurprisingly, the US dollar continues to lose ground under these circumstances. Recently, the US Dollar Index broke above the psychologically important 100 level on the downside, and is now trading near the 99 level.

A weaker US dollar is bullish for silver because it makes it more affordable for buyers who have other currencies. This is a particularly important factor considering that industrial demand plays a major role in the demand for silver.

Gold has managed to settle above $1,700 an ounce both spot and forward, and the rise in gold will likely lead to an influx of silver throughout the precious metals segment .

Other precious metals like palladium or platinum are also on the rise after gold’s move above $1700, confirming the theory.

Silver is approaching pre-crisis levels, and it will likely take continued market optimism to get there quickly. This week, the US stock market will be tested by early reports of big business earnings.

Currently, the market seems poised for bad news, but things could change quickly if earnings reports come with worse-than-expected forecasts. In my opinion, the direction of the stock markets could have a significant impact on silver in the coming days.

Technical analysis

Silver is currently testing the resistance level at the 50 EMA at $15.65. Should silver manage to establish itself above this level, it will have a very good chance of completing the rebound and returning to pre-crisis levels at $16.50.

The 20 EMA now sits near $14.90, the support level that has been repeatedly tested and proven to be strong. Currently, this is the first major support level for silver.

In case this level is breached on the downside, I would expect further support near the previous resistance at $14.60-$14.70. Previously, I expected more support for silver in the $14.30-$14.60 area, but as the price of silver (and the 20 EMA) rose, the support level expected also increased.

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