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  • Silver has rallied on the coattails of gold prices reaching to the moon, taking on the $2,000 level.
  • The US dollar has stalled in its recovery attempts from weekly lows in the 92 area, DXY.

The price of silver has been on the bid as the week gets going while investors chase the bid as gold finally takes on the $2,000 psychological level.

At the time of writing, the XAG/USD is trading at $25.7651 between a low of $24.1349 and a high of $25.8006.

Meanwhile, helping the cause, the US dollar is bleeding out in the session.

DXY is trading down 0.15% between a range of 93.83 the high to a low of 93.27 so far. 

Following its worst month in a decade, the US dollar is making an attempt to stabilise against its G10 peers and the majority of EM currencies, which throughout July benefited from its weakness, analysts at Rabobank note.

  • The USD bears will be determined to trigger a break below the long-term upside trendline as it would be a heavy blow to the bulls.
  • The worst is yet to come for the greenback amid rapidly rising costs of supporting the US economy as the country continues to struggle to contain the.pandemic, the bears will claim when making their case against the dollar.
  • They may also add that Biden’s presidency could trigger a major outflow from US stocks in favour of other assets, including European stocks as the EU currently looks far better organised than the US

Indeed, markets remain cautious over the USD as its attempts to stage a recovery from the weekly lows at 92.55. 

Gold to struggle from here on?

With the US dollar, interest rates, inflation expectations, momentum indicators, and positioning metrics all approaching key levels, a continued surge beyond $2000/oz might prove difficult for now,

analysts at TD Securities explained, capping silver’s progress at the same time. 

Renewed virus growth in Europe and Asia, along with boiling Chinese tensions, are just a couple other factors that could see the yellow metal consolidate in the near term, especially given the recent correlation between risk assets and gold,

the analysts at TD Securities added. 

Silver’s support structure

If bulls can hold above the support structure, there is still the potential of higher prices yet. 

However, a break below will target a confluence of the 50% Fibonacci retracement and the prior resistance on the daily chart.