Posted 1st June 2022

Is Silver Experiencing a Temporary Weakness?

silver precious metals analysis

While inflation continues to skyrocket, prices in Europe have grown by over 8% in the last 12 months.

The basic interest rates of the European Central Bank will most likely rise by the end of July, beginning a process of rate hikes.

The geopolitical tensions and new sanctions against Russia generated a temporary return of risk-off on the markets, while the US Dollar experienced some appreciation. During this time period, silver lost ground. The decline of the grey metal was significant from a technical point of view, due to the breakdown of the low reached last week at 21.6-21.7. In other words, the short-term scenario remains weak. 

Investors are showing a preference for gold, as silver is underperforming against its golden brother, which was confirmed by the jump to 85 of the gold-silver ratios. 

Moving focus toward the long term scenario, the current level could still represent an interesting buying opportunity, considering the solid fundamentals behind silver. Indeed, the grey metal is largely forecasted to be a key metal in many sectors of the ‘green transition’.

Live Silver Price – $/oz

Analysing the chart, we can now see a first support zone on yesterday’s low of $21,4, as these levels stopped the sell-off, generating a modest rebound to $21.6. A positive signal will be evident only with a strong return (with solid volumes) above the resistance zone of 21.9-22 and a surpass of $22.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.