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Silver Price Seeks Support at $26 as Commodities Continue a Correction

silver price
silver price

The silver price has seen a correction from the August 7th highs at $29.86. and the market moved lower to test the $26.00 price. A rebound in the U.S. dollar has spurred losses in commodities and we are also seeing weakness in stocks, which has taken the wind out of the recent bullish tone in markets.

We have two central bank interest rate meetings this week with the Bank of Canada today and the European Central bank tomorrow. If the banks announce any further stimulus measures then we could see gains in gold and silver. Both are expected to hold rates steady at their current level, however, there may be tweaks to recent measures such as bond-buying programs.

The dollar saw another move higher yesterday and there is possible short-covering going on with the greenback. U.S. stocks were also lower again and this raises the risk of liquidation in metals prices, which was a key theme in the mid-March lows with oil spiking lower and gold getting dragged down.   

A lot of the gold advance has been speculative with big flows into Exchange Traded Funds. A report by Fidelity saw ETF flows at a record high in the second quarter and over $24 billion of that was into commodities. If we see further losses in stocks then these flows could grind to a halt and remove support for precious metals into the year-end.  

Silver Price Technical Outlook

The correction in silver has broken an uptrend line that marked the push higher from July 19th. This adds weakness to the trend but the price has seen support at $26.00. This level will need to hold or a deeper pullback to $23.00 will be possible. The moving average sits around the $24.00 level. A move above $27.00 could see an attempt to get back on a bullish footing. For more detailed support and resistance studies get the Investing Cube Trading Course.

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Silver Price Daily Chart

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