Silver is struggling to regain upside momentum alongside gold, as risk-on trading sentiment returns to financial markets. This comes after Monday’s steep drop across traditional financial markets.
Silver price technical analysis shows that the metal could start to come under downside pressure if the price continues to be rejected from the pivotal $17.50 level.
Silver medium-term price trend
The medium-term outlook for silver prices is currently neutral, with the metal flatlining around its trend-defining 200-day moving average.
Silver buyers have failed to reclaim the pivotal $17.50 level, following the recent plunge towards $16.40.
Silver technical analysis over the medium-term shows that traders are confused about the direction of trade for silver prices, although the higher time frame still depict a large bullish pattern with significant upside potential.
As long as traders struggle to overcome the $17.50 level, silver prices may have to head lower before they can go higher again. Gold is also starting to look like it may have hit a peak this week, around the $1,700 level.
Silver short-term price trend
Silver price analysis over the short term shows that a bearish short-term bias is currently in force while price trades below the $17.70 level.
The lower time frames clearly show a bearish head-and-shoulders pattern, with more than $1.50 of downside potential.
Looking more closely at the lower time frames, the neckline of the pattern is found around the $17.30 level and projects a possible move towards the $15.80 area.
It is noteworthy that the early week plunge towards the $16.40 fell short of the overall bearish target of the pattern, which hints that silver may be heading lower again.
A sustained move above the $17.70 level would confirm the metal’s intention to test back towards the $18.10 and possibly the $18.90 technical area.
Silver technical summary
Silver price analysis indicates that silver needs to trade above the $17.50 level to encourage technical buying. A bearish pattern on the lower time frames warns of a possible upcoming drop below the $16.00 support level.