Silver Price News: Silver Slumps Back Below $31.50

Silver prices fell on Thursday, dropping back below the $31.50 an ounce mark, and giving up some of the sharp gains seen at the start of the week.

Prices fell as low as $31.14 an ounce by Thursday evening, compared with around $32.00 an ounce in late deals on Wednesday.

Silver had staged a dramatic rally on Monday and Tuesday, briefly hitting a fresh 11-year high of $32.70 an ounce. The latest gains appeared to attract some profit-taking on Thursday, pushing prices lower.

On the technical charts, the price action for silver in the second half of May has begun to resemble a ‘double top’ formation, and this is usually interpreted by traders as a bearish signal, as it implies that a recent upward trend has slowed down, making a downward reversal more likely in the short-term.

Should the price of the grey metal fall further in the coming days, the markets will be watching the $31.00 an ounce psychological support level, followed by the recent low of around $30.10 seen on May 24, to see if trend line support will kick in.

Conversely, any convincing push back up through the $32.00 an ounce level would nullify the double top formation, potentially clearing the way for further gains.

Looking ahead, the markets will be watching out for Friday’s Euro Area inflation figures for May, followed by the US Core PCE Price Index for April, for a handle on inflation levels and expected monetary policy changes by central banks in the coming months.