24K99 News On Thursday (May 9), spot silver prices surged nearly 4% to $28.00 per ounce, approaching the first bullish target of $28.50 per ounce. FXStreet analyst Christian Borjon Valencia recently wrote an article analyzing technical trends in silver prices.
On Thursday, as US Treasury yields fell sharply and the dollar weakened, the price of silver rose sharply, up more than 3.50%, writes Valencia.
Spot silver closed up 3.7% to $28.32 per ounce on Thursday.
According to Valencia, silver is bullish on the technical side. The Relative Strength Index (RSI) is above 60, indicating that there is more room for growth.
The dollar index was suppressed on Thursday after economic data showed more signs of weakness in the US job market. The ICE dollar index fell 0.28% to 105.22 on Thursday.
According to data released by the US on Thursday, the number of jobless claims in the US increased by 22,000 at the beginning of May 4 to 231,000, the highest level since the end of August last year, higher than the 215,000 expected by economists.
San Francisco Federal Reserve Chairman Daly said on Thursday that if the job market deteriorates, the Federal Reserve will consider cutting interest rates.
Technical analysis of silver
Valencia pointed out that after consolidating below the latest cyclical high of $27.733 per ounce set on April 26, the silver price soared above the $28.00 per ounce mark, and the bulls targeted the $28.50 per ounce mark.
Valencia mentioned that, as written on May 8, “The Relative Strength Index (RSI) is in a bullish zone, indicating that the momentum favors bulls.” This means that silver is likely to rise further as the RSI has just broken the 60.00 threshold and has plenty of room before turning overbought.
Valencia said that if buyers overcome the 23.6% Fibonacci retracement level of $28.49/oz, this could pave the way for the silver price to test $29.00/oz.
Once above $29.00 per ounce, the next target will be the year-to-date high of $29.79 per ounce, followed by $30.00 per ounce.
(Spot silver daily chart source: FXStreet)
On the other hand, Valencia added that if sellers drag the silver price below $28.00 per ounce, the short-term support level will be 38.2% Fibonacci retracement level of $27.70 per ounce, followed by a 50% Fibonacci retracement level of $27.05 per ounce.
Once the above levels are broken, the next support will be the psychological barrier of $27.00/oz.
At 08:33 Beijing time, spot silver was $28.35 per ounce.