- Summary:
- Silver price bulls look set to force XAGUSD towards the $30 in what has been an amazing run of price action to the upside in the last week.
Silver prices are soaring after US President Donald Trump hinted that a coronavirus vaccine could be ready as early as before November 3, which incidentally is the date of the US Election. Trump made these comments on the Geraldo Rivera radio program on Thursday when pressed on the issue. However, health experts including Dr Anthony Fauci, head of the top US infectious diseases agency, have said that a vaccine for the coronavirus could not be rushed and that the most feasible date would be in the first quarter of next year.
However, silver prices continue their staggering ascent as they headed above $28 on Thursday, buoyed by recovering manufacturing activity and increased demand from China. Analysts with Bank of America Securities are bullish on silver, and the bank has raised its 2021 price outlook for silver to $30.49, an increase from its earlier forecast of $21.95. This forecast is also expected to be good news for companies involved in the manufacture of silver as well as silver-based exchange-traded funds.
Open interest and overall volume on COMEX silver futures (e-mini) have risen from 759 and 749 contracts on Monday, August 3, to 765 contracts and 1,874 contracts respectively on Wednesday, August 5, indicating that silver is attracting more substantial interest from traders.
Technical Outlook for Silver Price
Silver price is currently trading at 28.12. The active price bar is now challenging the 28.05 resistance level, having surged 15.15% this week as at the time of writing. Price needs to break this price level with a 3% penetration close to the upside on the weekly chart to confirm the breakout. A successful breakout could potentially and make a case for a challenge of the 29.919 resistance target. Attainment of this price would make a $30 price target for silver a reality. Above this level, the 32.349 price target (December 2011 and January 2013 highs) beckons and would mark the first time in 7 years that silver has attained this level.
Conversely, we could also see silver prices staging a pullback towards the 28.07 price support, if the break of 28.05 is not confirmed. Supporting this standpoint would be an upbeat NFP number tomorrow. However, the momentum is with the bulls, and they may not mind a retracement to look for opportunities to buy on dips.
XAGUSD Monthly Chart
