Market analyst James Hyerczyk wrote that despite the recent surge in gold prices to historic highs, silver prices still face downward pressure. The silver price is currently below the 50 day moving average, indicating bearish sentiment. The downward trend of silver prices may challenge the bottom of $28.54 hit on June 26th. Breaking through this level may increase selling pressure, causing the price to further drop to $26.85 or even $26.17, and may even test the 200 day moving average.

Silver prices have supporting factors but also face drag

There are several factors that typically support silver prices. The probability of the Federal Reserve cutting interest rates in September is 97%, which theoretically should boost gold and silver. The political uncertainty following President Biden's withdrawal from the 2024 election, as well as potential trade conflicts during President Trump's tenure, may increase the attractiveness of silver as a safe haven asset. In addition, the role of silver as an inflation hedge tool remains important.

Despite these supporting factors, silver still faces significant resistance. Concerns about industrial demand, especially due to the economic slowdown in some Asian countries, may be one of the reasons for the poor performance of silver. The relatively strong US dollar makes silver more expensive for foreign buyers. The sluggish demand for physical goods in Asia and significant discounts reflect weak purchasing interest. Due to technical factors, silver trading below the key moving average may trigger additional selling pressure.

If it falls below the support level of $28.57, silver prices may further decline

Gold recently hit a historic high of $2483.56, thanks to its position as the primary safe haven asset during times of extreme uncertainty. This focus on gold may attract people's attention and capital towards silver.

The short-term outlook for silver seems bearish. At present, the dual properties of precious metals and industrial metals are unfavorable to them. Despite the support provided by monetary policy and geopolitical factors, the industrial composition of silver makes it vulnerable to economic slowdown.

Hyerczyk pointed out that if the silver price falls below the support level of $28.57, it may trigger further decline. However, upcoming economic data, changes in Federal Reserve policy expectations, or changes in industrial demand may bring volatility and potential turning points to the silver market.

The silver market is showing clear bearish signals. At present, the silver price is below the 50 day moving average ($30.18), approaching the key support level of $28.57. Breaking below this level may trigger a large-scale sell-off, with the target straight towards the 200 day moving average ($25.76). These technical analyses indicate that the downside risk of silver prices has increased and may begin to experience a larger decline.

Daily chart of spot silver