Silver prices (XAG/USD) rebounded to go above 20 EMA following increased investor sentiment and the stabilizing of the oil market situation. However with growing market uncertainties due to the coronavirus pandemic, prediction of market conditions for silver seems to be challenging.
Demand for silver has been growing since 2019
Since last year the demand for silver has been on the rise with a 12% growth in investment demand as an institution and retail investors turned their appetite on the long-term appeal of silver. Demand for silver was fueled by promising structural changes like electrification of vehicles as well as recovery of an important sector of photovoltaic.
The US dollar has been strengthening against other currencies with the US Dollar Index comfortably settling above 100.5. The US dollar had weakened because of encouraging the performance of riskier investments since it acts as a haven during the crisis. This is very important considering a stronger US dollar serves as a bearish trigger for silver. This is because it makes precious metals expensive for investors who might be holding other currencies.
Silver is currently trading between the range of 20 EMA around $15.00 and the 50 EMA around $15.50 going forward traders should expect more critical action with the spread between 20 EMA and 50 EMA narrowing.
After trading briefly around the compression region between resistance levels of $18.476 and support levels the precious metal slipped 30% but the selling pressure subsided and the price recovered after bottoming at $12.653. However, price action could be timid as Silver approaches resistance levels at 50 EMA near $16.50. On the flip side, they will have support levels at 20 EMA followed by $14.60 that is if support will be breached on the downside.
Time : 24-04-2020
Pivot : $15.22
Technical View : Long position above $15.42.
Target : $15.51.
Technical View : Short position below $15.02.
Target : $14.87.
Comments : Silver could outperform this year and go beyond resistance levels of 18.476
Last Price : $15.00