Spot Silver Drops 3% Despite Weak Dollar, Analyst Sees Potential for Further Decline
On Wednesday, July 17th, spot silver experienced a significant decline, falling by 3% despite the dollar's weakness. According to FXStreet analyst Christian Borjon Valencia, the drop was driven by profit-taking, pushing silver prices below $31.00 per ounce.
Spot silver closed at $30.29 per ounce, marking a 3.01% decrease, with prices reaching a session low of $30.03 per ounce. Valencia's analysis indicates that silver prices tumbled sharply from this week's high of around $31.42, as traders locked in gains following a more than 10% rise since early July. Despite the recent pullback, silver maintains an upward trend, supported by the 50-day moving average (DMA) of $30.12 per ounce. Silver briefly dipped below this level on Wednesday, hitting a daily low of $30.05 per ounce.
From a momentum perspective, Valencia notes that sellers are gaining traction, as indicated by a lower Relative Strength Index (RSI), although it remains in bullish territory. For silver to maintain a bearish outlook, it would need to fall below the 50-DMA, followed by the $30.00 per ounce mark. If these levels are breached, the next support would be the June 26th low of $28.57 per ounce. Further weakening could see silver prices drop to $28.00 per ounce.
Conversely, if buyers re-enter the market and push silver prices above $31.00, the next target would be the July 11 high of $31.75 per ounce. A sustained move above this level could drive silver prices to $32.00 per ounce.
