Silver prices are currently stabilizing near key technical support levels, continuing to trade below the 100-period moving average, which reflects persistent selling pressure.
Silver prices have dropped by about 4.6% since the beginning of the current week, and by 2.5% since the start of July, while year-to-date losses exceed 20%. The primary drivers behind this decline can be summarized as follows:
* Escalating concerns over a resurgence in inflation, which has negatively impacted investor sentiment.
* Rising oil prices, which may push central banks to keep interest rates high or even raise them further to curb inflationary pressures.
* Markets currently pricing in a probability exceeding 70% that the Federal Reserve will raise interest rates during the final quarter of the year.
Looking at the chart, silver is currently trading near $57 per ounce, a critical horizontal support zone that coincides with the support line of a continuation head-and-shoulders bearish pattern. A break below the $56 level could open the door for sustained selling pressure.
Conversely, a successful recovery above the $59.5 level, where the 200-period moving average is located, could signal a return of positive momentum and the potential start of a new upward wave.
Will silver succeed in regaining positivity by breaching the $59.5 resistance, or will breaking the $56 support pave the way for further declines?
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