Introduction:
The price of silver has struggled to maintain its gains in recent days, as it has experienced a three-day losing streak. This decline has seen the metal break a key upward-sloping support line from early March, with immediate resistance now near $25.65. In addition, the bearish MACD signals and the retreat of the RSI (14) line from overbought territory suggest that the metal is poised to test key moving averages.
Understanding the silver price decline
The silver price has been under pressure in recent days, as investors continue to grapple with the uncertainty of the global economic recovery. With many countries still struggling to contain the COVID-19 pandemic, there are concerns that the recovery could be slower than expected. This has led to a flight to safety, with many investors turning to assets such as gold and silver.
Break of key upward-sloping support line
The recent decline in the silver price has seen it break a key upward-sloping support line from early March. This suggests that the metal is facing increased selling pressure, with immediate resistance now near $25.65. This resistance level is likely to be a key hurdle for the metal in the near term, and could cap any potential gains.
Bearish MACD signals and retreat of RSI
Adding to the downside bias for the silver price are the bearish MACD signals and the retreat of the RSI (14) line from overbought territory. These technical indicators suggest that the metal is likely to face continued selling pressure, and could test key moving averages in the coming days.
Testing key moving averages
With the silver price poised to test key moving averages, investors will be watching closely to see how the metal responds. A convergence of the 10-DMA and 21-DMA, around $25.35-30, is likely to provide support for the metal. If the silver price is able to hold above these key moving averages, it could signal a potential rebound in the near term.
Conclusion
Overall, the recent decline in the silver price has been driven by a combination of factors, including the uncertainty surrounding the global economic recovery and technical indicators such as the bearish MACD signals and retreat of the RSI. With the metal poised to test key moving averages, investors will be watching closely to see how it responds. If the silver price is able to hold above these key levels, it could signal a potential rebound in the near term.
