Silver is caught in a consolidation phase, moving within a narrow range between $37.33 and $38.74. The metal continues to trade around its 20-day moving average ($38.04), with a lack of clear momentum as traders await the next decisive move. The current market sentiment reflects indecision, with silver maintaining a steady price action while testing key support and resistance levels.
Technical Analysis: Short-Term Range-Bound Movement
Silver’s price action has been muted for the past eight sessions, confined to a range between $38.74 on the upside and $37.51 on the downside. The metal’s current price sits just above the 20-day moving average, and attempts to break higher have been capped by the Fibonacci resistance at $38.74. For silver to push higher, it would need to decisively close above this level, signaling a potential shift in the trend.
On the downside, the 50-day moving average at $37.33 provides critical support. Silver has successfully tested this level multiple times, reinforcing its importance as a key dynamic support zone. If silver breaks below the $37.51 level, traders will closely watch how it reacts to the 50-day moving average to gauge the strength of the support. A failure to hold above $37.33 could lead to further downside pressure, potentially revisiting lower levels within the channel.
Key Support and Resistance Levels
- Support: The immediate support is found at $37.33, which aligns with the 50-day moving average and an uptrend line, making this area crucial for maintaining the bullish bias. A break below this could trigger further weakness.
- Resistance: On the upside, $38.74 is the key resistance level to watch. It marks the 78.6% Fibonacci retracement from the recent move, and silver has faced rejection at this level multiple times. A breakout above this level could signal a continuation of the bullish trend.
Broader Trend Outlook: Potential for a Larger Correction
Looking at the broader picture, silver is still within an ascending parallel channel that has guided its price action since early 2024. The upper boundary of this channel has capped rallies in the past, and silver has shown resistance to breaking above this line. A sustained failure to hold the 50-day moving average and a close below $37.33 would increase the likelihood of a deeper correction within the channel.
Conclusion: A Waiting Game for Traders
For now, silver remains in a waiting pattern, trading between Fibonacci resistance and moving average support. Traders are awaiting a breakout from this consolidation range to determine the next directional move. The 50-day moving average and the $38.74 resistance level will be key in guiding short-term price action. A break in either direction could lead to significant momentum, while the market remains cautious in the absence of major catalysts. Investors should watch for potential volatility in the coming sessions, as silver could either extend its range-bound movement or break out decisively.
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