Silver prices undergo correction after reaching yearly high of $26.00
Anticipated growth in Chinese economy and demand for precious metals
Silver reached a year-high of $26.00, driven by negative movements in the US dollar index and expected demand from China
This week, silver underwent a correction and is currently trading at $24.80 levels
Despite the current correction, the overall upward trend for silver in the medium-term remains unchanged
Economic factors impacting silver trading amidst global economic uncertainty
After experiencing a surge against the US dollar driven by robust Chinese economic data, silver trading has been impacted by several economic factors. The Chinese economy exceeded expectations and improved outlook for the demand of metals and commodities in the world's largest consumer market. However, with the United States potentially heading towards an economic recession due to its tightening monetary policy, Austin Goolsbee, a member of the US Federal Reserve, warned that a mild recession is still possible for the US economy, leading to negative movements in the US dollar index.
As a result, silver began trading with a significant decline today, hovering around $25 levels. This dip coincides with the release of many critical economic data from the United States this week, including weekly jobless claims and sector performance, which provides insights into the US economy's early second-quarter performance. These factors, along with global economic uncertainty, are expected to continue impacting silver trading in the near future.
Key support and resistance levels influencing silver price movement
Silver has recently surged to a year-high of $26.00, but has since undergone a correction, testing the $24.50 level. This level has transformed from a resistance level to a critical support level for the price. If silver maintains this support level, it may rebound and rise to test the resistance level of $26.00/30. A successful break of this resistance level may lead to an extension of the rise to $28.25 levels.
However, if silver experiences a decline and breaks below the $24.50 support, maintaining prices below this level could result in a further decline towards the support level of $23.00. If this level is also broken, the pace of the decline may increase, and the next support level to test would be the upward trend support level of $21.50.
It is essential for silver prices to remain above the $24.50 level to confirm the short and medium-term upward trend. Maintaining this support level will play a crucial role in shaping the future movement of silver prices.