Silver Video 10.07.20.
Silver Tries To Get To The Second Test Of The Major Resistance At $19.00
Silver failed to get above the major resistance at $19.00 on its first attempt but stayed above $18.50 as gold received support above the $1800 level while the U.S. dollar declined against a broad basket of currencies.
Today, the market was initially worried about the worsening situation on the coronavirus front as the U.S. has recorded a record number of daily coronavirus cases.
However, the global risk sentiment got a boost after Gilead Sciences reported that it had additional data from a late-stage study on remdesivir which showed that it significantly improved recovery and reduced death risks in COVID-19 patients.
After this news, the U.S. Dollar Index, which has previously tried to get above the 97 level, declined towards 96.5. A weaker U.S. dollar is bullish for silver and other precious metals as it makes them cheaper for buyers who have other currencies.
Meanwhile, gold managed to find support near the $1800 level and continues its upside move. Gold price upside is very important for other precious metals since it attracts more investment money into the segment.
As I wrote yesterday, The Silver Institute reported that silver investment demand increased by 10% in the first half of 2020. As precious metals continue their upside move, investment demand is set to increase further.
Gold/silver ratio continues its downside trend and remains below 97. Gold/silver ratio will have to settle below 95 to gain more downside momentum which will be bullish for silver.
Silver found support at $18.50 and will likely make another attempt to get above the major resistance at $19.00 soon.
Compared to the previous attempts to get above this level which took place at the beginning of the year, silver has better chances to gain more upside momentum.
If this happens, silver will head towards the next resistance level at $19.50.
On the support side, the first support for silver is located at the previous resistance near $18.50. A move below this support level will likely lead to increased downside momentum and take silver closer to the next support level near the 20 EMA at $18.00.
For a look at all of today’s economic events, check out our economic calendar.