Silver fell on Tuesday as the market filled the gap from Monday’s open, with a strengthening US dollar and rising rates keeping pressure on the metal. Traders are watching the $60 level, while $57 marks the support that could give way toward $50.
Silver dropped during Tuesday’s session as the market filled the gap left by Monday’s open, extending a downtrend that has run for some time. A strengthening US dollar against many currencies, together with rising rates, remains the biggest force weighing on the metal.
Dollar strength sets the tone
DailyForex analyst Christopher Lewis argues that silver’s slide is no surprise while the greenback keeps climbing and interest rates continue to rise. The $60 level is the mark many traders are watching. Overhead, the 200-day EMA at $67.08 stands as a barrier.
Below current trading, $57 offers support, and a breakdown under it could send silver much lower, perhaps toward $50. Lewis expects that at the first signs of exhaustion, traders who are long will look to get out.
Levels that could shift the picture
A move above the $70 level would open the door to a bigger advance, but Lewis thinks that would take a major shift in conditions. Interest rates would probably have to drop, and the dollar would have to give back some of its strength. In the longer term, he sees silver as an asset that probably goes much higher, yet for now the focus is on the currency implications of a strong greenback rather than future demand.
Fundamentals stay firm beneath the technicals
The backdrop still favours the metal. FXEmpire reports that silver traded at $60.78 after a sharp decline from a $69.85 high that carried it down to the 0.618 Fibonacci retracement level, with higher lows off a $57.51 swing low pointing to buyers on dips. The site notes that silver continues to benefit from expanding industrial demand in solar panels, electronics and electric cars, while limited mine supply growth supports both gold and silver.
Sources: DailyForex, FXEmpire
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