Silver Price News: Silver Falls Back Below $29.00 An Ounce

Silver prices dropped on Tuesday, losing around 2% in value and coming close to a six-week low.

Prices fell as low as $28.87 an ounce on Tuesday, down from around $29.56 an ounce in late trades on Monday. That was within striking distance of the June 13 low of $28.70, and a fall below that level would take silver to its lowest price since mid-May.

Silver’s fall on Tuesday was more pronounced than that of gold, which eased slightly in rather subdued trading in the first two days of the week.

From a technical perspective, silver is now at a critical juncture, as a four-month bullish trend is looking like it will be tested, and in the shorter-term, a bearish price channel has emerged since late May. This suggests a combination of buyers being unwilling to continue supporting prices at these higher levels of above $30.00 an ounce and/or sellers willing to sell into the peaks.

The US dollar rebounded against other major currencies on Tuesday, following a drop on Monday, presenting a bearish factor for dollar-denominated assets like silver as it makes the metal more expensive for buyers in other currencies.

Looking ahead, macro data releases this week include Euro Area economic sentiment figures for June on Thursday, followed by US durable goods orders for May and the US GDP growth rate for Q1. Then on Friday, the US core PCE price index figures will be released for May – the US Fed’s preferred measure of inflation.

The markets appear to be pricing in up to two US Fed interest rate cuts in the autumn, which would be seen as supportive for precious metals prices, although the risk is that signs of strength in the economy could put policymakers under pressure to put off rate cuts until later.