Silver price (XAGUSD) is tumbling today as traders reflect on the first presidential debate between Donald Trump and Joe Biden. The metal is down by more than 2% and is trading at $23.95. Other metals like gold, copper, platinum, and palladium are also in the red today.
Silver price has been under pressure since August, when it approached the important resistance level of $30. Since them, the price dropped to $23 in August, rose back to $28.6, and fell to below $22 last week.
There are several factors that explain this volatility. First, the US dollar has recently been moving sideways. It has fallen sharply against most peers like sterling and the euro. A weak euro is usually a negative sign for silver and other metals.
Second, the overall market has been relatively volatile. All assets like stocks, commodities, and currencies have been relatively weak and volatile recently. In most times, silver price tends to have a sharp response whenever there are key issues in the market.
Third, silver price has been volatile because of indecision between bulls and bears especially after the price reached a multi-year high.
Finally, investors are now thinking about the upcoming US election and its impact. Indeed, the decline today is mostly because of the debate between Joe Biden and Donald Trump. Analysts believe that Biden would be a better president for silver because of the investments in green energy that he would implement. He has already said that he would allocate more than $1 trillion to transition the world to clean energy. The situation will be better if Democrats sweep the House of Representatives and Senate.
Silver price forecast
The daily chart shows that silver price has pulled back after rallying for the past two consecutive days. The price is still below the 25-day EMA and the important resistance level at $25.85, which is the lowest level in July and August. The price is also slightly above the ascending trendline that is shown in blue. This line connects the lowest levels in March, May, June, and part of this week.
Therefore, I suspect that the price will continue falling but bears will need to move below last week’s low of $21.56. On the flip side, a move above the 25-day EMA at ~25 will invalidate this trend.
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Silver technical chart
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