Nearly Breaking a Record, Is Silver's Rally Starting to Become Dangerous?
Silver prices are fluctuating today after a strong rally that reached an all-time high of around $59.33 per ounce. The white metal briefly corrected by around 1.4% due to profit-taking, but investor interest remains solid. Inflows into silver-based ETFs last week were the strongest since July, reaching nearly 590 tons, indicating that many market participants believe the silver rally still has room to continue, although the 14-day RSI indicator is approaching overbought territory and signaling the risk of a technical correction.
Fundamentally, the silver rally is supported by expectations of a Fed rate cut this week, making non-yielding precious metals like silver and gold attractive again. This year, silver prices have more than doubled, outpacing gold's rise by around 60%. This is also supported by technical factors such as a historic short squeeze and high silver lease rates in London of around 6%. Tight supply conditions, particularly stocks in Shanghai near a decade-low, as well as a surge in activity in Comex micro options and futures contracts, are adding to the medium-term bullish sentiment for silver.
The price of silver at the time of this analysis was released was at $57,861.
- Buy if the price is at $58,161.
- Sell if the price is at $57,561.
Resistance 2: $58,761.
Resistance 1: $58,461.
Support 1: $57,261.
Support 2: $56,961.
Disclaimer
This article is analytical in nature and is not a definitive reference. Please consider fundamental and technical developments in trading before making any investment decisions.
Source: Newsmaker.id
