Bearish Scenario: Sales below 80.00 with TP1: 79.34, TP2: 78.94, TP3: 78.55, and 78.00 Bullish Scenario: Buys above 78.00 (wait for a retracement to the zone) with TP: 79.34 TP2: 80.00, and TP3: 81.00
Silver: trading sideways
2020-08-27 • Updated
The Forex history counts six silver bull market periods, and the seventh one is possibly right now. Even though gold has a higher price and generally grabs more attention, silver has actually outperformed gold in five of the six previous bull markets for gold and silver. The chart below demonstrates the silver performance during its resurgences.
*Only once gold managed to outperform silver.
Silver is not just a precious metal, it is also an important raw material for industrial purposes. It is widely used in healthcare, electronics, and renewable energy. As you can notice, the tech sector has been prospering these days as never before. Just look at Nasdaq, the stock index, which includes the strongest tech companies. No wonder that it sets record highs almost every day. Therefore, the industrial and technological application of silver couldn’t have been more important for the current time.
In comparison with its safe-haven brother, gold, silver is cheaper and tends to react less to political upheavals and economic hardships. However, it still does react. Besides, gold and silver price movements are positively correlated. The recent optimism over a thaw in US-China relationships weighs on both precious metals. Today, although the USD’s weakness generally pushes silver prices up, it gets offset by the increase in US government bond yields.
Silver has bounced off the 61.8% Fibonacci level at $27.40 but then has turned to the upside again. If it crosses this level again, it will drive the price further to the next resistance at the high of August 18 at $28.45. However, be cautious as this resistance is quite strong, and, therefore, the price is likely to pull back rather than break out. In the opposite scenario, if silver breaks out the 50.0% Fibonacci level at $26.60, it may dip down to the next support at the 38.2% Fibonacci level of $25.85. Bulls may find both support levels a good entry point as they will want to take advantage of “cheap silver”.
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