Silver turns positive after again testing key support

Both gold and silver prices have been undermined recently by the ongoing rally in the stock markets, with investors preferring the racier equities over the perceived-haven metals. However, with the US dollar struggling for direction and global central banks all turning dovish recently, I continue to believe that the downside is limited for precious metals and a surprise recovery could be on the cards soon. As such, I am keeping a close eye on both metals for possible bullish reversal signals. Today, we may have seen a possible low form in silver, although further price action is needed to confirm this potential reversal signal.

The price of silver fell earlier to its lowest level in 2019, reaching $14.85, before turning around to turn green on the day. Gold has likewise recovered from its session lows to trade near the day’s highs at the time of writing. Silver found support from the $14.80-$15.00 long-term pivotal area, which we have previously highlighted as being a technically important region. Silver bulls will need to push the price of the metal above its most recent high of $15.35, hit just last week, in order to regain further control. If that were to happen, I would turn decidedly bullish on the metal for then we will have our first higher high. However, if silver fails to achieve that and eventually drops below the aforementioned support area beneath $14.80, then in that case I would drop my bullish view on the metal.

Figure 1:

Silver

Source: TradingView and FOREX.com.

Risk Warning Notice Foreign Exchange and CFD trading are high risk and not suitable for everyone. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. Margin and leverage To open a leveraged CFD or forex trade you will need to deposit money with us as margin. Margin is typically a relatively small proportion of the overall contract value. For example a contract trading on leverage of 100:1 will require margin of just 1% of the contract value. This means that a small price movement in the underlying will result in large movement in the value of your trade – this can work in your favour, or result in substantial losses. Your may lose your initial deposit and be required to deposit additional margin in order to maintain your position. If you fail to meet any margin requirement your position will be liquidated and you will be responsible for any resulting losses.