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Silver Price Daily Forecast – Silver Rallies Towards $21.00

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Silver Video 21.07.20.

Silver Gets To New Highs As Gold/Silver Ratio Declines To Pre-Pandemic Levels

Silver managed to get above the resistance at $20.00 and gained significant upside momentum which led to the test of the next resistance level at $21.15.

The key reason for silver upside is the EU recovery fund deal which will lead to the creation of a 750 billion euro coronavirus recovery fund.

The news on the recovery fund provided material support to precious metals as traders bet on additional upside due to never-ending monetary stimulus.

Gold broke to new highs and continued its upside move as fundamentals remain favorable. Gold has not visited current levels since 2011, and the highs that were reached at that time are now in sight.

There’s also a major development on the gold/silver ratio front. In a major move, gold/silver ratio declined below 88, marking the return to pre-pandemic lows.

As I noted many times, the return to pre-pandemic lows has always been one of the components of the bullish thesis for silver, and now this factor is in play.

Meanwhile, the U.S. dollar remains under pressure against a broad basket of currencies. The U.S. Dollar Index is currently testing lows that were reached back in June.

However, American currency did not gain significant downside momentum, and a rebound from current levels is possible. Such a rebound will be bearish for silver in the near-term, especially given the magnitude of the recent rally.

Technical Analysis

Silver moved above $20.00 and quickly rallied towards $21.15 where it met significant resistance. This resistance level has the potential to be a material obstacle on silver’s way up since RSI is in the overbought territory and a pullback may be coming soon.

If this happens, the nearest material support level for silver is located at $19.50, although some support will likely present itself at higher levels.

On the upside, the next resistance for silver is located at $21.50. However, it should be noted that silver did not trade that high since 2014 so it remains to be seen where silver will meet material resistance in case it gets above $21.15.

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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