Silver Prices: Bounce Putting Shorts to the Test
- Gold and silver prices showing near-term strength, but…
- Resistance levels ahead may prove formidable
- Short-term trend in silver is favorable, a sharp break would skew risk back towards trend resumption
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The last time we looked at silver prices over a week ago, risk looked skewed to the downside as the metal was failing to garner much buying interest around the 16 line. Since then, though, both silver and gold have experienced nice bounces. Gold more-so, but silver is seeing some decent buying pressure as well. The US dollar stall and fall is helping fuel the bounce.
Since July the price of silver has been trending lower, marked by the clear sequence of lower highs and lower lows; until this changes the trend doesn’t. But with that said, there is room for silver to trade up towards resistance surrounding 17. At which point we would take especial interest in how it reacts given its significance since June. Gold is approaching the 1190/1200 area it broke down from back in November; a test of that critical area will be watched with keen interest as well.
For now, the short-term trend in silver is higher, and until it can snap back lower taking out previous daily lows, we view silver in a neutral to slightly bullish light. A drop to 16 or worse will likely mean the trend is resuming, and may call for us to turn our attention back towards the previously targeted area around 14.80/50.
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.