Silver appears to have set a significant bottom after long-term support holds, notes Fawad Razaqzada.
Both gold and silver prices have been undermined recently by the ongoing rally in stocks, with investors preferring equities over the perceived safe-haven metals. However, with the U.S. dollar struggling for direction and global central banks all turning dovish, the downside is limited for precious metals and a surprise recovery could be in the cards soon. As such, it would be smart to keep a close eye on precious metals for possible bullish reversal signals. Today, we may have seen a possible low form in silver, although further price action is needed to confirm this potential reversal signal.
The price of silver fell earlier to its lowest level in 2019, reaching $14.85, before turning around on the day (see chart).
Source: Tradingiew and FOREX.com.
The QuantCycle Oscillator on the daily silver chart indicates near-extreme oversold conditions as it expects silver to turn higher (see chart).
Gold has likewise recovered from its session lows to trade near the day’s highs at the time of writing. Silver found support from the $14.80 to $15.00 long-term pivotal area, which we have previously highlighted as being a technically important region. Silver bulls will need to push the price of the metal above its most recent high of $15.35, hit just last week, in order to regain further control. If that were to happen, I would turn decidedly bullish on the metal for then we will have our first higher high.
However, if silver fails to achieve that and eventually drops below the aforementioned support area beneath $14.80, then further losses could be expected.
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