Silver Falls Again, Eyes 22 USD

Silver Falls Again, Eyes 22 USD
As US yields continue to increase, the precious metals sector remains vulnerable.
Both gold and silver dropped more than 1% today, although traders were trying to buy the dip during the US session.

According to Reuters, Germany's economics minister stated on Monday that Russia might cut off gas supplies to Germany, as it did to Poland. However, Germany was not opposed to a restriction on Russian oil imports.

Meanwhile, Beijing declared on Sunday that all restaurants would be closed, and people will be required to provide documentation of a negative COVID test in order to enter public places. This comes as the country prepares for a five-day holiday weekend.

Weaker than expected US macro

In other news, the US manufacturing ISM unexpectedly fell in April, printing 55.4, against expectations of 57.6 and 57.1 previously. Moreover, the employment index dropped more than expected from 56.3 to 50.9, and prices paid aka. inflation gauge remained elevated above 80.0.

Testing major support

It looks like the significant support could be found above the 22 USD level, where bulls reentered the market today, trying to stop the weakness. However, as long as the price remains below the 200-day moving average (the green line), the medium and short-term outlooks appear bearish.

If the 22 USD support is broken to the downside, we might see another leg lower as large stop losses will be hit, likely dragging the metal toward 21.50 USD in the initial reaction.

On the other hand, the decline has been steep, implying oversold conditions, which usually lead to intensive short-squeeze rallies. In this case, bulls might target the 200-day moving average near 23.70 USD.
Show More Articles
Axiory uses cookies to improve your browsing experience. You can click Accept or continue browsing to consent to cookies usage. Please read our Cookie Policy to learn more.