Silver Drops Toward $28.50 Due To Bearish Bias

(June 27, 2024 - Akhtar Faruqui)

• Silver price may extend losses as daily chart analysis indicates a bearish bias.
• The 14-day RSI suggests that Silver price trades within a range between $29.70-$28.70.

Silver price continues its losing streak for the third successive session, trading around $28.70 per troy ounce during the early European session on Thursday. An analysis of the daily chart indicates a bearish bias as the XAG/USD pair consolidates within the descending channel pattern.

The momentum indicator Moving Average Convergence Divergence (MACD) indicates the strengthening of bearish bias for Silver. This configuration indicates that the overall trend turns negative as the MACD line breaks below the centerline and a signal line.

The 14-day Relative Strength Index (RSI) is consolidating below the 50 level, suggesting Silver price trading within a range between $29.70-$28.70. If the RSI declines below the 30 level, it generates buy signals and indicates an oversold condition of the commodity asset.

On the downside, the Silver price may find key support around the psychological level of $28.00. A break below this level could exert pressure on the Silver pair to approach the vicinity around the lower threshold of the descending channel around the level of $27.50.

In terms of resistance, the Silver price may find the immediate barrier around the nine-day Exponential Moving Average (EMA) at $29.30, followed by the significant level of $30.00.

A breakthrough above the latter could lead the price of the grey metal to reach the upper boundary of the descending channel around the level of $30.50. A breakthrough above the latter could lead the Silver pair to test the four-week high of $31.55.

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.