Silver Rallies as Gold/Silver Ratio Declines to 74

(October 19th, 2021 - Vladimir Zernov)

Silver Gained Strong Upside Momentum

Silver is currently trying to settle above the $24 level while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index declined below the 20 EMA at 93.85 and made an attempt to settle below 93.50. In case the U.S. Dollar Index manages to settle below 93.50, it will head towards the support level near the 50 EMA at 93.40 which will be bullish for silver and gold price today.

Meanwhile, gold moved back above $1775 and is trying to develop additional upside momentum. The next resistance level for gold is located at $1800. In case gold gets to the test of this level, silver will get more support.

Gold/silver ratio developed strong downside momentum after it managed to settle below the support at the 50 EMA at 75.90. Currently, gold/silver ratio is trying to get below the 74 level. This move was the main driver of today’s silver strength, and it looks that traders rushed to buy silver in a bet that gold/silver ratio will continue to decline in the upcoming trading sessions.

Technical Analysis

Silver settled above the resistance level at $23.50 and is trying to settle above the next resistance level which is located at $23.90. In case this attempt is successful, silver will head towards the resistance at $24.30.

A move above $24.30 will open the way to the test of the resistance at $24.50. In case silver manages to settle above $24.50, it will head towards the resistance at $24.80.

On the support side, a move below $23.90 will push silver back to the support level which is located near the 50 EMA at $23.50. In case silver manages to settle below the 50 EMA, it will move towards the next support level at $23.20. A successful test of this level will open the way to the test of the next support which is located at the 20 EMA at $23.00.