Silver prices traded below the 2020 low/2021 high range. Having broken through 18.7064, a more significant sell-off towards 16.000 may still be in the works. However, recent changes in sentiment suggest that silver prices have a mixed bias in the near-term.
Once again, silver prices established a fresh yearly low today, a continuation of the sell-off spurred following the symmetrical triangle bearish breakout in the second half of June. The grey metal barreled through 18.7064, a key level outlined at the end of June, suggesting that an even deeper setback is still unfolding.
The fundamental side of the equation hasn’t changed. “The ongoing rise in US real yields – nominal US Treasury yields less US inflation expectations (as measured by breakevens and inflation swap forwards) – coupled with global recession concerns has curated a difficult environment for silver prices.” A weak fundamental narrative continues to underpin an equally weak technical outlook.
With a new 2022 low on the books, silver prices fulfilled an expectation outlined at the end of June: “a move towards the 2020 low/2021 high range at 18.7064.” The sell-off in silver prices is consistent with the symmetrical triangle bearish breakout a few weeks ago, given that the preceding direction was to the downside. Momentum retains its bearish hue. Silver prices are below their daily 21-EMA envelope, which is in bearish sequential order. Slow Stochastics are holding in oversold territory. A ‘sell the rally’ perspective remains appropriate for the foreseeable future.
Trade accordingly with your risk