Silver has now broken below the key support level around $58.50, reinforcing the bearish technical outlook. Following yesterday's sharp decline, the next major area of support appears to be around $49.50 if selling pressure continues.
The breakdown also strengthens what appears to be a descending triangle, a pattern that is typically considered bearish.
Unless silver can reclaim the former support area around $58.50 and move back above the 10-day exponential moving average near $59.50, followed by the 20-day moving average around $61, the technical picture continues to favour further downside.
A recovery above those resistance levels could pave the way for a rally towards $67.50. However, momentum remains weak, with the relative strength index (RSI) continuing to suggest that silver is vulnerable to making fresh lows.
The US dollar also remains an important factor. Although softer-than-expected US consumer price index (CPI) and producer price index (PPI) data have weighed on the dollar this week, the decline has been relatively modest. If the US Dollar Index resumes its broader uptrend, it would likely create an additional headwind for silver.
Recent price action suggests that easing inflation expectations alone have not been enough to support precious metals, with silver recording its lowest close since December following yesterday's sell-off.
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.
The breakdown also strengthens what appears to be a descending triangle, a pattern that is typically considered bearish.
Unless silver can reclaim the former support area around $58.50 and move back above the 10-day exponential moving average near $59.50, followed by the 20-day moving average around $61, the technical picture continues to favour further downside.
A recovery above those resistance levels could pave the way for a rally towards $67.50. However, momentum remains weak, with the relative strength index (RSI) continuing to suggest that silver is vulnerable to making fresh lows.
The US dollar also remains an important factor. Although softer-than-expected US consumer price index (CPI) and producer price index (PPI) data have weighed on the dollar this week, the decline has been relatively modest. If the US Dollar Index resumes its broader uptrend, it would likely create an additional headwind for silver.
Recent price action suggests that easing inflation expectations alone have not been enough to support precious metals, with silver recording its lowest close since December following yesterday's sell-off.
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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면책사항
해당 정보와 게시물은 금융, 투자, 트레이딩 또는 기타 유형의 조언이나 권장 사항으로 간주되지 않으며, 트레이딩뷰에서 제공하거나 보증하는 것이 아닙니다. 자세한 내용은 이용 약관을 참조하세요.