Silver price prediction: how steady is the support at $24
- Silver price is back above the crucial support level of $24, although its gains will likely be curbed.
- US dollar, whose value is inversely correlated with that of precious metals, is on a correction.
- Treasury yields have extended Wednesday's low after the strong auction of the 10-year yield notes.
Silver price is back above $24 after dropping below this crucial support level earlier on Thursday. The US dollar and Treasury yields will remain the key drivers in the ensuing sessions.
Pullback in US dollar
Since the beginning of the week, the US dollar has been rallying; boosting the dollar index to a two-week high of 92.87 on Wednesday. At that level, it entered the overbought territory at an RSI of 79. The subsequent pullback has triggered a relief rally for silver price, which had dropped to below the crucial support level of $24 earlier on Thursday.
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The value of the US dollar usually has an inverse correlation with precious metals. As such, a bounce back of the dollar index will likely curb the gains recorded by silver price.
At the same time, Treasury yields have extended Wednesday’s loss as a reaction to the strong demand for the 10-year yield notes. The Treasury auctioned yield notes worth $38 billion. It is also set to avail 30-year bonds worth $24 billion on Thursday.
As the week comes to an end, the US dollar and Treasury yields will continue to impact precious metals’ price movements. Data on US producer prices, which is scheduled for release on Friday, will further sway the market.
Silver price prediction
Silver price has bounced back above the crucial support level of 24 after dropping below it earlier on Thursday. Earlier in the week, the precious metal hit a high of 24.83. However, it erased those the gains by falling to an intraday low of 23.83 on Thursday.
At the time of writing, it was up by 1.38% at 24.27. On a two-hour chart, it is trading slightly above the 25 and 50-day exponential moving averages. In the near term, silver price will likely remain above the psychological level of 24. It will probably trade within a tight range of between the support level of 24.10 and resistance level of 24.30, which is where the 25 and 50-day EMAs previously intersected.
While it remains a viable target, 24.50 will likely be evasive in the near term. On the flip side, one cannot dismiss the porosity of the support level at 24, which could give way to a fall lower to Thursday’s low of 23.83.