XAGUSD Silver Price

Silver Price Could Soon Drop to $23 – 2 Chart Patterns Show

Silver price, also known as the devil’s metal, has been under pressure in the past few months. After soaring to a multi-year high of $30 in February, the price has dropped by more than 15% and is trading at $25 per ounce even after some positive news.

Silver news: The price of silver has retreated even after some positive macroeconomic data. Just last week, data by Markit showed that global manufacturing activity improved in February. This was a positive thing for the metal since it has industrial uses. 

Also, in the United States, the government has already passed a sweeping $1.9 trillion stimulus package that will lead to more growth and demand for silver. And there is now talk about a $4 trillion deficit-funded infrastructure project. All these could have positive impacts on the silver prices. 

Advertisement

Further, the recent fears of inflation have eased a bit, which has led the bond yields to cool down recently. This is positive for the devil’s metal since it means that low interest rates could continue. However, technicals suggest that the worst is yet to come.

Silver Price Prediction

The head and shoulders pattern is one of the most popular reversal patterns in the market. A look at the four-hour chart shows that this pattern has formed, with the neckline being at the $24.82 level. The price remains slightly below the 25-period and 15-period exponential moving averages (EMA). Most recently, the price has also formed what seems like a bearish flag pattern. 

Therefore, in my view, the path of least resistance for silver prices is in the downside. If it happens, we cannot rule-out another drop to $23 in the near term.

Don’t miss a beat! Follow us on Telegram and Twitter.

Silver chart

Silver Price

More content

Related Posts: