Silver’s decline continues to evolve and appears to be entering another phase of consolidation, ahead of what is likely to be its next leg lower. The price of the precious and industrial metal has already fallen below the previously noted bear flag, breaking support at $76.50. It now appears to be forming a smaller bear flag pattern, consolidating around $74. A break below $74 could trigger a further decline towards $70.25. However, the $70.25 level is the real test, as a break of that support could open the door to a move towards $60.
At $60, silver prices would have extended by approximately 61.8% beyond the initial bear flag measurement, which began on 10 March. Since then, silver prices have declined by roughly 17%. Meanwhile, momentum, as measured by the Relative Strength Index (RSI), has been consolidating sideways. This suggests that although price has fallen, momentum has remained relatively stable, with no meaningful downside acceleration so far. An RSI reading around 45 is broadly neutral. However, a break below $74 could push the RSI lower, indicating increasing downside momentum.
Resistance near $76 appears strong, based on multiple recent tests, serving as both support and resistance. However, if the price were to break above $76, it could trigger a more meaningful advance, potentially allowing silver to rally back towards $80.50.
Written by Michael J. Kramer, founder of Mott Capital Management.
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
At $60, silver prices would have extended by approximately 61.8% beyond the initial bear flag measurement, which began on 10 March. Since then, silver prices have declined by roughly 17%. Meanwhile, momentum, as measured by the Relative Strength Index (RSI), has been consolidating sideways. This suggests that although price has fallen, momentum has remained relatively stable, with no meaningful downside acceleration so far. An RSI reading around 45 is broadly neutral. However, a break below $74 could push the RSI lower, indicating increasing downside momentum.
Resistance near $76 appears strong, based on multiple recent tests, serving as both support and resistance. However, if the price were to break above $76, it could trigger a more meaningful advance, potentially allowing silver to rally back towards $80.50.
Written by Michael J. Kramer, founder of Mott Capital Management.
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
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