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Silver Holds Two Key Support Levels and Could See Further Gains

Silver price
Silver price

The silver price has found support after the U.S. dollar retreated from the recent rally. Renewed discussions over another stimulus package has been bullish for silver as fears over the U.S. debt and spending levels were one the key catalysts for the July rally in commodities.

House leaders have yet to decide on a date for a vote on the proposed $2.2 trillion package, but there is speculation it could be this week. The talks hit a stalemate recently over the size and content of the relief effort but it’s possible that something could be agreed ahead of the election.

Today is a key day for the U.S. election as the first Presidential debate is scheduled between Donald Trump and Joe Biden. The result of the debate will have a bearing on markets due to the different paths of the two candidates on economic and foreign policy. Polls have said that Biden has been leading but this has had little bearing on the stock market despite his desire to raise taxes and commit to large climate spending.

The economic calendar is packed for the U.S. dollar this week with a finalized GDP figure tomorrow, alongside ISM manufacturing on Thursday and payroll data on Friday. The key number for silver, however, will be Thursday’s PCE inflation number. Precious metals gained on the idea of runaway inflation coming later down the line, so a steeper rise in prices could spur gains. If the number came in lower than expectations then it might hint at potential stimulus pressure on the Federal Reserve so some volatility is likely in the silver price.

Silver Technical Outlook

Silver has found support at two key levels and has the potential to rally further. The $22.30 level was first support and the price then rallied above the August 12th lows $23.40. The resistance ahead for silver will be around the $25.00 level and the 50-day moving average at $26.00. A close near $22.30 would open up the potential for further losses. 

Silver Daily Chart