Silver prices remain stable at $33.85, facing challenges in breaking the $34.00 resistance for the third consecutive session. The Relative Strength Index (RSI) is flattening near overbought levels, indicating a potential regrouping of buyers.
A lack of upward momentum has hindered a push towards last year’s peak of $34.86. If the $34.00 mark is not surpassed, a pullback may occur, with initial support at $33.39 and further support at $33.00.
Factors Impacting Silver Prices
Silver’s movements can be influenced by various factors, including geopolitical tensions and the strength of the US Dollar. The metal also sees changes based on industrial demand and its correlation with Gold prices.
This consolidation near $34.00 suggests hesitation in the market, where buyers and sellers are reaching a temporary standoff. The flattening RSI near overbought territory tells us that while the bullish trend remains intact, buying enthusiasm may be slowing. When momentum stalls in these conditions, price corrections are common, as short-term traders lock in profits.
Without fresh catalysts, prices are struggling to push beyond last year’s high of $34.86. A failure to maintain pressure above $34.00 could mean a retreat, where $33.39 serves as the first line of defence. If that breaks, $33.00 would become the next level to watch. This does not necessarily indicate weakness in the bigger picture, but it does highlight where traders might start adjusting their positions.
External Market Influences
External influences remain central to price action. Geopolitical tensions can drive investor demand for safe-haven assets, while fluctuations in the US Dollar often shape metal prices. Since Silver also has industrial applications, shifts in economic outlook or manufacturing demand could alter its trajectory. Additionally, its connection to Gold means movements in that market often have a spillover effect.
For traders working with derivatives, acknowledging these factors is imperative. Price congestion at resistance levels can lead to breakout attempts, but they can also cause retracements when unsuccessful. Watching for changes in momentum, along with external forces, will help in adjusting trading strategies smoothly.
