Silver price falls on a stronger US Dollar

Sliver price news, and analysis

• The US economy grows by a near 5% in Q3
• Mixed signals on the silver daily price chart

The US dollar index surged to multi-week highs today, following news that the Republican Party had successfully elected Mike Johnson (an ally of former President Donald Trump) as the new Speaker of the House of Representatives. This outcome signals the restoration of the House of Representatives’ functionality, which had been in limbo since President McCarthy’s removal. The incoming president will need to collaborate with the Democrats to prevent a potential government shutdown on November 17. Any failure to reach an agreement between the two parties could adversely impact American consumer spending and increase the chances of an economic recession in the coming year.

Moreover, the US dollar prices were lifted by third-quarter GDP data, which exceeded expectations at 4.9% compared to the anticipated 4.3%. This data demonstrated a significant improvement from second-quarter figures, which stood at 2.1%. Additionally, September’s US durable goods data showed growth at 0.6%, outperforming the expected 0.1%. It’s important to note that an increase in the value of the US dollar tends to put downward pressure on commodity prices, as the dollar serves as the pricing currency for these commodities. As a result, both gold and silver retraced some of the gains they had made earlier in the trading session.

Sliver Price Daily Chart

Chart source ADSS Platform

On October 13, the silver price broke above the bearish trendline originating from the August 30 high at 25.00, suggesting a correction in its previous downtrend. However, at the start of this week, the daily candle failed to close above the 200-day simple moving average, and yesterday’s candle closed below the 50-day simple moving average. These developments indicate a lack of sufficient momentum to initiate an upward trend and imply that bears may press for a test of the low end of the current trading zone located between 23.52 – 22.06.

A daily close below the low end of this zone could signal a further decline towards $20.30. Nonetheless, the support level residing at 21.28 should be watched closely.

Conversely, a daily close of silver prices above the high end of mentioned trading zone opens the door for a potential rally towards $24.69. That said, the resistance level situated at 24.10 should be kept in focus.