Last week, silver prices came under significant selling pressure, dropping to $36.20 for the first time since early July. However, as the price approached the strong support level of $36, the downward momentum slowed. The decline was further limited by the ascending trend line from April’s low and the 50-day moving average. By the end of Friday’s trading session, silver had closed higher, thus signaling a potential new upward wave. The next key target for a rebound appears to be $38.2.
The picture for silver is a bit less optimistic on the 4-hour timeframe. This is due to prices breaking below the two-month ascending channel. To re-enter it, the metal needs to quickly push above the $37.6 level. Further upside will encounter resistance at the 200-period moving average, which is currently near $37.3. Nevertheless, technical indicators have already begun to turn upward, supported by shifting news sentiment.
Friday's US jobs report triggered sharp market volatility. While July's data met expectations, downward revisions to previous months' figures caught traders off guard. The dollar plunged, reigniting demand for silver and other precious metals as safe-haven assets.
The latest data pushed market expectations for a Fed rate cut in September to nearly 80%—a dramatic doubling in just one day. This shift weighed on the US greenback while boosting the value of dollar-denominated commodities. Meanwhile, the gold-to-silver ratio climbed above 90 again, therefore highlighting gold’s recent outperformance. However, as investors have seen multiple times this year, silver tends to catch up with a delayed but stronger upward move.
Here's a trading strategy to consider:
Buy silver at the current price. Take Profit: $38.2. Stop Loss: $36.
This content is for informational purposes only and is not intended to be investing advice.
