24K99 News on Monday, June 17th, despite the weakening of the US dollar, the spot silver price still suffered a blow, once approaching the important level of $29.00 per ounce. FXStreet analyst Christian Borjon Valencia wrote a new article analyzing the technical outlook for silver.
Valencia pointed out that silver prices fell on Monday. As U.S. Treasury yields rose on hawkish comments from Fed officials, it weakened silver prices. The first support level for silver is at the 50-day moving average (near $29.01 per ounce).
Spot silver closed down 0.28% on Monday at $29.45 per ounce; the lowest silver price during the day fell to $29.02 per ounce.
The yield on 10-year U.S. Treasury notes rose nearly six basis points to 4.281% on Monday.
Philadelphia Fed President Harker said on Monday that based on his current forecast, he believes one rate cut in the year is appropriate. This emphasizes the signal that interest rates may remain high.
Harker said: "If all goes as expected, I think it would be appropriate to cut rates once before the end of the year. In fact, I think there is a good chance that rates will cut twice or zero this year, depending on which way the data goes. So we're still relying on the data."
Harker currently expects economic growth to slow, but still above the trend line, and the unemployment rate to rise moderately. He also believes that the return to the Fed's inflation target will be a "long process."
Before this past weekend, Minneapolis Fed President Kashkari said the Fed would cut rates again in December.
What's next for silver?
Valencia wrote that silver prices are neutral to bearish after hitting an 11-year high of $32.51 per ounce. Gold prices fell back to the area around the 50-day moving average (DMA), which is near $29.01 per ounce, which is the first support level.
Valencia pointed out that the trend has turned bearish, with the relative strength index (RSI) below the 50 midline.
Therefore, the first support level for silver will be the 50-day moving average. If the silver price falls below this level, the next support level will be the 100-day moving average of $26.40 per ounce, followed by the May 2 low of $26.02 per ounce.
(Daily chart of spot silver, source: FXStreet)
Valencia added that on the other hand, if silver buyers hold onto $29.00 per ounce and clear the $30.00 per ounce level, they will have to test the year's high of $32.51 per ounce again.