While higher-yielding assets like stocks and risk currencies benefitted from today’s positive market sentiment, silver price did not. The commodity is down by 34 cents from its opening price as it currently trades around 15.11. Why?
Silver, like gold, is considered as a safe haven asset. In times of duress, silver price tends to go higher as investors seek its safe haven credibility. On the other hand, days like today are bearish for the commodity because positive developments on the coronavirus vaccine eased market concerns spark risk appetite. As reported by my colleague, Nikolas Papas, Gilead reported promising results of its Remdisivir medicine.
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Silver Price Outlook
On the 4-hour time frame, it can be seen that silver price has broken support at the rising trend line (from connecting the lows of March 18, March 19, April 1, April 6, April 9, and April 13). This suggests that there may not be enough buyers in the market for the commodity to continue its uptrend. It’s also worth pointing out that XAGUSD has made a head and shoulders pattern. This is considered as a bearish reversal indicator. So, watch out for a strong bearish close below the neckline support around 15.10. This could indicate that silver price would soon fall to its March 31 lows at 13.85.
On the other hand, this bearish bias on the commodity could be invalidated if XAUUSD rallies above yesterday’s highs at 15.57. This would be a signal that there are still buyers in the market to push silver price to near-term resistance around 16.60.
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