Silver Forecast: Silver Finds Support at the 20 USD Level – 09 March 2023
Investors must keep a close eye on the market’s movements, as well as Jerome Powell’s statements, to make informed trading decisions.
The silver market experienced a bit of a rollercoaster ride on Wednesday, initially falling but then finding enough buyers to turn things around and show signs of life. After the major selloff during Tuesday’s session, Jerome Powell’s suggestion in front of Congress that interest rate hikes may be coming quicker than people thought led to a sharp rise in the US dollar, working against the value of silver and other commodities.
Silver is highly sensitive to the US dollar, and as a result, there is a negative correlation between silver and the US Dollar Index. Thus, investors must pay close attention to that chart amidst the current volatility in all assets. On Wednesday, as Powell spoke in front of Congress once again, the absence of any shocking statements may have led to the stabilization of silver overall. Moreover, the $20 level sits at the 61.8% Fibonacci level, making it a technical indicator that a lot of people will pay attention to.
If the market breaks down below the bottom of the candlestick, it could signify lower pricing, and silver could drop to the $19 level quite quickly.It is important to note that the recent high was near the psychologically significant $25 level, which has been a strong defense point for several years.Even if silver rallies in the near term, breaking above $25 will be quite challenging.In fact, it is likely that the highest price for silver in this cycle has already occurred.
Although silver may rally from time to time, it often disappoints long-term investors. The market tends to attract silver bulls looking for a “buy-and-hold” position, but they often get sucked in by the market’s movements. Even if silver does rally, I anticipate that breaking above $25 will be challenging. Silver will continue to experience a lot of volatility, and investors must pay attention to Jerome Powell’s statements as they will have a significant impact on the market.
Ultimately, while the recent market volatility suggests that silver is trying to rally, there is still a lot of uncertainty. Investors must keep a close eye on the market’s movements, as well as Jerome Powell’s statements, to make informed trading decisions. The most important thing you can probably do is keep your position size reasonable because volatility breeds more volatility by the time it is all said and done.
Ready to trade our daily Forex analysis? We’ve made a list of the best Forex trading platforms worth trading with.