Spot Silver Prices Plunge Over 4%, Confirming “Double Top” Pattern

Spot silver prices tumbled by more than 4% on Tuesday, June 4, closing at $29.468 per ounce. This decline, highlighted by FXStreet analyst Christian Borjon Valencia, came as traders took profits and silver fell below key support levels, confirming a "double top" pattern. The target for this pattern is $27.80 per ounce.

Valencia pointed out that the sharp drop below the latest cycle high of $29.79 per ounce, set on April 12, signals further potential declines. Traders saw the confirmation of the "double top" pattern, indicating a test of key support levels ahead.

Jim Wyckoff, senior analyst at Kitco Metals, attributed the sharp fall in gold and silver prices during Tuesday's U.S. trading session to the significant drop in crude oil prices this week, which has unsettled the entire commodities industry. The markets were characterized by long position closing and profit-taking by short-term futures traders.

U.S. WTI crude oil futures fell more than 1% on Tuesday and have declined for five consecutive sessions.

Valencia identified the first target for silver prices at the psychological level of $29 per ounce. Below this, key support levels include the May 18, 2021 high of $28.74 per ounce and the June 10, 2021 high of $28.34 per ounce. The ultimate target for the "double top" pattern stands at $27.80 per ounce.