Silver price has not had a definite direction in the current year. On the one hand, it skyrocketed to above $30 in February and dropped momentarily below $22 in September. Unlike its “illustrious cousin” – gold – the precious metal has not recorded distinct uptrends or downtrends.
The attractiveness of the stock and crypto markets is one of the key factors behind silver’s muted performance. Equity market benchmarks like NASDAQ and S&P 500 have steadily been hitting new record-highs. Besides, cryptocurrencies’ popularity has surged in 2021; an aspect that shifted investors’ focus from non-yielding assets like silver and gold.
Furthermore, the US dollar has been rater strong for better part of the year. The dollar index, which tracks the value of the greenback against a basket of six currencies, is currently at 95.94. The figure is its highest level since July 2020.
On the one hand, the strengthening dollar may continue to exert pressure on silver price as inflation concerns heighten. However, its status as a hedge against inflation will probably boost the precious metal.
Silver price technical outlook
Silver price is hovering around the psychological level of 25.00 for the fifth session in a row. At the time of writing, it was up by 1.04% at 25.08. On a four-hour chart, it is trading above the 25 and 50-day EMAs.
I expect the precious metal to remain within a range of between Tuesday’s high of 25.42 and along the 50-day EMA at 24.74. Below this horizontal channel, 24.50 will likely be the support level to look out for. On the flip side, a move above the resistance level of 24.50 will place 26.00 as the next target.