More investors are looking forward to the economy reopening as the Dow Jones Industrial Average saw another positive day of gains during Tuesday’s trading session. This, of course, kept safe haven precious metals at bay like silver, but as prices of the commodity took a breather, it makes traders wonder where it will go from here.

“Silver is mostly flat today following the two-day major upside move,” an FX Empire report stated. “The market environment remains supportive for silver price upside as the U.S. dollar is under pressure, the stock market is optimistic while gold trades close to recent highs.”

In the meantime, the U.S. dollar will continue to be the primary catalyst as to where silver winds up moving forward.

“The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has settled below the 98 level and continues its downside move,” the report added. “The weaker U.S. dollar is bullish for silver and other precious metals as it makes them more affordable for buyers who have other currencies. While the demand for the U.S. dollar as a safe haven asset has decreased, gold continues to trade near recent highs as some investors hedge against the potential equity market sell-off.”

Gold prices will also be another determinant of where silver may go as it has reached new highs thanks to the pandemic.

“Silver has just made a significant move so it may need some time to consolidate near current levels in order to have a chance for additional upside,” the report said. “At the same time, gold is near highs, and the potential upside move in gold can serve as a bullish catalyst for the whole precious metal segment.”

Traders looking to play silver’s reaction to the recent Fed rate decision can look to leveraged ETFs like the VelocityShares 3x Long Silver ETN Linked to the S&P GSCI Silver Index ER (NasdaqGM: USLV) and the ProShares Ultra Silver (NYSEArca: AGQ).

USLV seeks to replicate, net of expenses, three times the S&P GSCI Silver Index ER. The index comprises futures contracts on a single commodity. The fluctuations in the values of it are intended generally to correlate with changes in the price of silver in global markets.

AGQ seeks daily investment results that correspond to two times (2x) the daily performance of the Bloomberg Silver SubindexSM. The fund seeks to meet its investment objective by investing, under normal market conditions, in any one of, or combinations of, Financial Instruments (including swap agreements, futures contracts, and forward contracts) based on the benchmark. The types and mix of Financial Instruments in which the fund invest may vary daily at the discretion of the Sponsor.

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