Technical signals point to a bearish outlook for silver, with prices struggling to stay above critical support levels, indicating weak momentum. The metal is trading below its 200-day moving average of $29.62, raising the likelihood of further declines. A key downside target is at $27.71. However, if silver crosses the 200-day moving average again, it could trigger a short-covering rally as bargain hunters enter the market.
Traders are focusing on upcoming US economic data, including the key PCE inflation index and GDP reports, which could impact the dollar and, in turn, silver prices. Without a catalyst to break the current pattern, silver will likely face continued selling pressure.
What is the short-term outlook for silver?
Silver prices are expected to remain subdued in the near term as the combined impact of a strong dollar and rising rates overshadow potential demand for safe havens. A test of lower support levels seems likely unless economic data weakens significantly, undermining the dollar’s strength. Geopolitical risks and weaker economic indicators could provide temporary relief, but the broader outlook remains bearish for now.
Traders should keep a close eye on the key numbers as they will play a crucial role in shaping the next steps for silver. Moreover, the reaction at the 200-day moving average of $29.62 will set the tone.