Silver Futures Index $SILVER (SILVER)

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Silver Faces Persistent Downtrend, Key Levels Under Threat
By: Bruce Powers | July 1, 2024

• Silver remains in a downtrend, testing key moving averages with selling pressure dominant, signaling potential further declines unless a clear bullish breakout occurs.

Silver further consolidated on Monday and is on track to end with an inside day. It remains in a downtrend and again tested the 20-Day MA (purple) today as resistance and then sold off intraday. The day’s high was 29.48 and the low was 28.96.

There was also a successful test of resistance at the 20-Day line last Friday. Today’s high generates a lower daily high relative to Friday’s high, a short-term sign of weakness. Further, although silver popped back above the orange 50-Day MA both today and Friday, it closed below it the previous four days and it may do so again today. Silver is already below its uptrend line.



Downtrend Remains Dominant

Taken together, unless there is a clear bullish sign, silver is pointing lower. It remains in a developing downtrend. A failure to break above the 20-Day line, as well as the closes below the 50-Day line, show selling pressure remaining dominant.

Subsequently, a decline below today’s low of 28.96 is a sign of weakness and may be the beginning of the end for the small bullish retracement of the past several days. Friday’s low was 28.77 and Thursday hit a low of 26.68. Those price levels can be watched for additional bearish confirmation, while a bear trend continuation signal is indicated on a drop below the current retracement low at 28.57.

Following the decline below the uptrend line on June 24, silver fell below the 50-Day line before finding support at 28.57. That low completed a 61.8% Fibonacci retracement of an internal upswing, which correlates with the May 2021 swing high of 28.75. If the latest swing low fails to maintain support the next lower target zone is around the 78.6% Fibonacci retracement at 27.41, followed by 27.0, which was previous resistance at the March 2022 interim swing high.

Rise Above 29.73 Would Reflect Strength

For a bullish sign, a decisive breakout above last week’s high of 29.73 would be needed. That would also put silver back above the 20-Day MA. Additional signs of strength would then be needed. Recapturing the 30.14 price level would provide additional signs of strength.

The 30.14 price level comes from the peak in 2021. It remained the high intraday traded price for silver up until the decisive bullish breakout on May 17 of this year. Notice the clear bullish momentum and strong daily close on the breakout day. Therefore, recapturing the 30.14 price level could see buyers return more aggressively to assist in the continuation of the bull trend.

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