The silver price has been under pressure in the past few days as concerns about the Omicron variant remains. The metal is trading at $22.37, which is about 12% below its highest level this year. It is trading at the lowest level since October 12th.
Silver is a leading industrial metal that is used in the manufacture of a variety of things like kitchenware, solar panels, and computer chips. The metal’s price does well when the economy is doing well. This explains why the silver price jumped by more than 20% between September 29th and mid-November.
In the past few days, however, the situation has changed as investors worry about the new Omicron variant. There is a lot that we still don’t know about this variant. However, recent data shows that it could be able to evade the existing vaccines. Therefore, there is a likelihood that it will disrupt the overall recovery of the economy.
Silver price has also retreated because of the relatively hawkish tone from the Federal Reserve. In his testimony to Congress this week, Jerome Powell hinted that the bank will taper quickly in the coming months. As such, there is a likelihood that it will end its quantitative easing policy in the first quarter of the year. Silver does well in a period of easy money policies.
Silver will next react to the latest US nonfarm payrolls data scheduled for Friday this week.
Silver price prediction
The four-hour chart shows that the price of silver has been in a major bearish trend in the past few weeks. In this period, it has managed to cross the key support level at $23. This was both a psychological level and also the lowest point on November 3rd. The metal has also crashed below the 25-day and 50-day moving averages while oscillators have also dropped.
Therefore, the path of the least resistance for silver price is to the downside and there are risks that it will crash to $20 in the near term. This view will remain as long as the coin is below the 25-day moving average.