Silver Price Daily Forecast – Silver Tests New Highs At $27.00
Silver Video 05.08.20.
Silver Continues To Rally As Gold Breaks To All-Time Highs
Silver rallied above the resistance level at $26.20 and is currently trading near $27.00 as the U.S. dollar continued to decline against a broad basket of currencies while gold rallied to all-time highs.
The U.S. Dollar Index continued to lose ground on rumors that the Fed would promise to boost inflation, leading to years of very low interest rates.
In addition, there is no notable progress in negotiations between Republicans and Democrats, and the market fears that coronavirus aid talks will require more time.
Weak U.S. dollar boosts precious metals as it makes them cheaper for buyers who have other currencies. The recent downside move of the U.S. dollar has allowed gold to get above the psychologically important $2000 level.
Meanwhile, gold/silver ratio has declined to new yearly lows which is very bullish for silver. In fact, gold/silver ratio has not been that low since June 2018.
In my opinion, the U.S. dollar will continue to serve as the main catalyst for the rally in precious metals. Currently, the U.S. Dollar Index has settled below the 93 level and is trying to get below the recent lows at 92.50.
If this attempt is successful, the U.S. dollar will likely gain additional downside momentum, providing more fuel to precious metals’ rally.
Technical Analysis
Silver has managed to settle above the previous high at $26.20 and is testing the next resistance level at $27.00.
Silver has not traded that high since 2013 so previous resistance levels have little relevance for today’s trading.
In case silver manages to get above $27.00, it will likely gain additional momentum and head towards $28.00.
I’d note that the previous major upside move in silver which started back in 2010 and ended in 2011 was also very fast so silver has previously proven that it is able to move up rapidly.
On the support side, the nearest support level for silver is located at the previous resistance at $26.20
A move below this support level will open the way to the test of the next support level at $24.95.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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