The silver price saw a steep sell-off as the latest push higher by the U.S. dollar hit commodities across the board. The precious metal dropped through the 50-day moving average and closed under the $25.00 level for the first time since August 11th.
Gold and silver have been struggling with a lack of new stimulus announcements. The U.S. Congress has seen talks over a new stimulus package stall and it may be unlikely to see one passed ahead of the election. The Federal Reserve have also clarified their position on monetary policy over the last two weeks although we have testimony from Jerome Powell this week, alongside other Fed speeches, we may not see any new updates that could boost precious metals.
The attention of U.S. politics has turned to filling the Supreme Court seat ahead of the November election and that could hamper the stimulus package talks further. The U.S. dollar is now trading above its own 50-day moving average and this could see further gains for the greenback from the current 94.00 level.
Flows into Exchange Traded Funds saw a record high in the second quarter of 2020 and some of that went into commodity ETFs. The stimulus checks from government would have been a driver and this will be another headwind for commodities before the election. There should still be appetite for safe havens but silver may be looking at a correction to find a solid support base.
Silver Price Technical Outlook
The silver price breakdown breached the 50-day moving average and this puts the precious metal at risk of further losses. There is some support down to the $20.00 level but we will have to follow developments in the USD for the strength of a silver pullback. The market could still start another leg up from here but it would need to get above the moving average again. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
Silver Price Daily Chart