Silver (XAG/USD) Price Outlook:
Silver (XAG) Price Forecast: Can Risk Aversion Fuel a Silver Rally?
Stocks slipped as gold and silver enjoyed a boost on Monday morning after coronavirus fears worked to undermine risk appetite. While risk-off sentiment was largely dominant, silver eventually retraced much of its earlier gains, helping to highlight the strength of resistance around $18.35. Therefore, further deterioration in risk appetite may be required for silver to surmount the area and continue higher.
Silver Price Chart: Daily Time Frame (June 2019 – January 2020) (Chart 1)
Charted created with TradingView
Two weeks ago, I argued silver was likely headed lower in the shorter-term as it looks to consolidate before an eventual extension higher. Evidently, unforecastable themes have come into the fray and could look to cut the consolidation period short. Still, a daily close above $18.35 will be required before the resistance can be deemed broken. Should it break, the metal’s path higher will be relatively unobstructed, allowing XAG to probe secondary resistance around the September highs at roughly $19.50.
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With upcoming earnings from Apple and a looming Fed rate decision, silver should enjoy plenty of potential catalysts in the week ahead. To that end, retail traders remain convinced Silver is headed higher – a fact we typically view as a bearish indicator, but one that works to complicate price prognostications in this instance. Nevertheless, traders should be wary of a break out above $18.35 in the days to come as it could allow for further gains.
–Written by Peter Hanks, Junior Analyst for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX