Silver price has been boring this week. On Monday, it dropped by almost ten per cent to $23.60 after Donald Trump refused to concede and as Democrats lacked the clear mandate in the senate. Since then, the price has oscillated in this range, and is currently trading at $24.30.
In the past few months, the price of silver has been on a strong upward trend as traders placed their hopes on a Biden presidency. The argument was that Biden would increase the spending on clean energy, which would benefit solar companies. In the campaign, he pledged to invest more than $2 trillion to deal with climate change.
Now, while Biden has won the presidency, the incumbent has refused to concede and votes are being recounted in Georgia. At the same time, there is no clear winner in the senate, which is complicating his presidency.
Still, there is a lot he can do to boost the clean energy sector and silver prices. For example, he can add spending on clean energy through a new stimulus package. Also, he can choke the fossil energy industry with regulations, which would lead to a transition to solar energy. Silver is a major component used in solar panels manufacture.
Silver prices are also falling because of the rising number of Covid cases. In the United States, the number of cases increased by more than 142k, pushing the total number of infections to more than 10.6 million.
More cases are increasing in Europe, which risk pushing the world to another recession. While a vaccine is almost ready, analysts worry that its impact on the economy will not be felt right away. Unlike gold, silver is an industrial metal that does well when the world economy is doing well.
Silver price technical outlook
On the daily chart, we see that silver price has been in a narrow range this week. This consolidation has happened between the 23.6% and 38.2% Fibonacci retracement level. It is also along the 25-day and 15-day exponential moving averages. It is also between the small triangle pattern that is shown in pink and is close to the psychological level of $20.
Therefore, with the triangle close to the level of confluence, there is a possibility that it will break-out in the next few days. If it does, the key support and resistance levels to watch will be at $22.5797 and the resistance at $25.9535.
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Silver prices technical chart
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