Yahoo Finance Silver Price Daily Forecast – Silver Declines Below $17.50
Silver Video 05.06.20.
Silver Is Under Pressure After Better-Than-Expected U.S. Employment Reports
Silver continues to pull back from recent highs following the release of better-than-expected U.S. employment reports.
U.S. Unemployment Rate was 13.3% in May compared to 14.7% in April while the U.S. Non Farm Payrolls report showed that 2.5 million jobs were created in May.
Both reports were much better than analysts expected, and their release provided additional support to the equity market.
Interestingly, the U.S. dollar is gaining ground after the release of these reports, putting additional pressure on silver. The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has rebounded from 96.5 and settled closer to 97.
The U.S. Dollar Index has been in a downside trend since late May, and a reversal of this trend may put some pressure on the precious metal segment. A stronger U.S. dollar is bearish for silver as it makes it more expensive for buyers who have other currencies.
Just like silver, gold is under pressure and has declined below the key $1700 level. However, it remains to be seen whether this move below the psychologically important level will lead to a sell-off.
Gold/silver ratio continues to rebound from the 95 level. I’d note that the pace of this rebound is modest, and gold/silver ratio maintains its chances to get to pre-crisis levels below 90.
Technical Analysis
Silver declined below the support level at $17.50 as demand for precious metals decreased after better-than-expected U.S. Unemployment Rate and Non Farm Payrolls reports.
The next support level for silver is located at $17.00. This level has already been tested many times and proved its strength, so silver will have to develop significant downside momentum to get below $17.00.
If this happens, silver will move closer to the next support at pre-crisis levels at $16.50.
On the upside, the previous support at $17.50 will serve as the first resistance level for silver. In case silver manages to get above this level, it will head towards the next resistance level at the recent highs below $18.50.
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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