Silver price has been under pressure in the past two days. The metal is trading at $26.70, which is 10% below the highest point on Monday at $30.
Silver news: Silver has been in the news a lot lately because the shiny metal was caught in the Wall Street Bets craze. The surging demand during the weekend saw it jump to its eight-year high of above $30.
However, the Wall Street Bets craze has now faded and shares of companies like AMC and GameStop have declined by more than 60% in the past few days. Similarly, digital currencies like Ripple and Dogecoin have also dropped. So, what next for the price of silver?
Silver price outlook
Last week, amid the WSB craze, I predicted that the price would surge to about $29.8. And on Monday morning, I said that the price would retest that level. Indeed, this is what happened as the momentum continued.
In the past two days, the metal’s price has retreated because of the so-called pump and dump situation. However, a closer look at the daily chart shows that the silver price is still in an uptrend and is being guided by the 25-day and 50-day moving averages.
A closer look shows that the price has been forming a cup and handle pattern. It completed the cup part on Monday and is now forming the handle. The cup part can be a simple consolidation or a pullback. It seems like the latter is happening.
Therefore, in the next few weeks, I suspect that the silver price will rebound and move above the YTD high of $30. However, this thesis will be invalidated if the price moves below $24, the lowest level on January 18.
Silver technical chart