Just like gold, silver price performed strongly in yesterday’s trading on mounting concerns about the coronavirus pandemic in the US. XAGUSD finished yesterday’s trading at $18.68, up from where it opened at $18.24. Are there enough buyers in the market to push the precious metal to new 2020 highs?
Yesterday, it was reported that coronavirus cases in the US have officially gone above the 3 million mark. As of this writing, data shows the count being at 3,054,650 which is the highest in any country in the world. As reported by my colleague Eno Eteng, the recent surge in new cases could have been driven by Independence Day celebrations. With this, investors are concerned that it may only be a matter of time until most states reimpose lockdown restrictions which would once again cripple the US economy.
On the daily time frame, it can be seen that silver price is testing its recent highs. If there are enough buyers to push XAGUSD to close above its February 24 highs at $18.92, the next resistance level for the commodity would be at $19.62. This is the price where silver topped in September 4, 2019.
Silver Price, Daily Chart
A closer look at the 1-hour time frame shows that buyers could be bracing for another move higher. This is evidenced by the recent price action on XAGUSD with the precious metal consolidating after a strong rally. With this, a bullish flag pattern has formed. When you enroll in our free forex trading course, you will learn that this is a bullish continuation pattern. A strong close above yesterday’s highs may mean that XAGUUSD is headed higher.
On the other hand, a bearish close below today’s Asian session low at $18.63 could mean thay silver price may soon retrace some of its gains. Should this happen, we could soon see XAGUSD fall to $18.26 where it may test the rising trendline (from connecting the lows of June 24, June 25, June 26, July 2, and July 7). This price also coincides with the 61.8% Fib level when you draw the Fibonacci retracement tool from the low of July 7 to the high of July 8.