On Thursday (February 6th) during the European trading session, silver experienced a correction, ending its three-day upward trend and falling back to around $32.00, a 0.75% drop from the previous three-month high of $32.55. Despite the short-term pullback, the overall trend of silver is still driven by market sentiment and influenced by some external factors.

Firstly, the uncertainty in the global economy and financial markets still provides support for precious metals. With the global economic slowdown, persistent inflationary pressures, and market expectations of changes in central bank monetary policy, the market is seeking safe haven assets, especially precious metals. This makes silver still attractive as a safe haven asset in uncertain market environments.

However, a pullback in silver prices may also attract bargain hunting, especially when support levels are formed on a technical level. Traders closely monitor the future trend of the US dollar and global economic dynamics, especially the monetary policy of the Federal Reserve and the global economic growth prospects. These factors may determine the short-term trend of silver prices.

Technical analyst interpretation:

From a technical perspective, the recent trend of silver is crucial, especially breaking through the key technical level of the $31.00 region. This breakthrough includes a 38.2% Fibonacci retracement level and a 100 day moving average, and is seen by the market as a key trigger for a bull market. After breaking through, silver prices further rose, breaking above the 50% Fibonacci retracement level (around the $31.70-31.75 range), and the positive oscillation indicators in the daily chart also confirmed this upward trend.

Therefore, from a technical perspective, if the silver price further falls below the $31.75-31.70 range or falls below the intraday low, it may provide a buying opportunity for the market. After falling below this level, silver prices may form strong support around $31.00. $31.00, as a resistance area in the early stage, is expected to transform into support, which is expected to provide effective support for silver prices and limit their downward space.

However, if the silver price effectively falls below the support level of $31.00, it may intensify downward pressure, accelerate its decline towards the support zone of $30.25, and even touch the important psychological barrier of $30.00. At this point, market sentiment may change and selling pressure in the market may increase.

On the other hand, the $32.55 area has now become a direct resistance zone for silver prices. If the silver price can successfully break through this level, it may push the silver price further up, testing the psychological barrier of $33.00, which will be the first challenge since early November. It is worth noting that $33.00 also represents a 61.8% Fibonacci retracement level, and if silver prices break through this level, it may bring greater upward potential.

Overall, the recent trend of silver prices has been influenced by both technical and fundamental factors. Despite the pullback, silver prices may still face range fluctuations in the short term, with support and resistance levels being key points for market trading. In the short term, the $31.75-31.70 range may become a support level, and a breakthrough could lead to a greater adjustment, while the resistance level around $32.55 determines whether silver prices can continue to rise.