Silver – Another Rally Within The Longer Term Downtrend?

Silver has experienced a reversal of its fortunes over the last 2 weeks, trading from 7-month lows hit on June 23rd at 55.589 all the way up to close on Friday, July 3rd at 62.369. Perhaps unsurprisingly this rally has coincided with the reopening of the Strait of Hormuz, which has seen oil plummet back below $70, easing inflation concerns which had weighed heavily on Silver during June. Not only that, but Thursday’s weaker US jobs numbers saw expectations for Federal Reserve interest rate hikes, possibly as early as the end of July, ease back, reducing the downside pressure on Silver and other precious metals that pay no interest or dividends.

Looking forward, the week ahead is light on events, other than the release of the Fed minutes from their June meeting, the first under new Chair Kevin Warsh, which are due on Wednesday at 1900 BST. This may mean price action, sentiment and the technical outlook could take on greater significance. The Monday open has seen prices drop 1.2% down to 61.609 at the time of writing (0700 BST), which may suggest a nervy few days ahead for Silver traders..

Technical Update: Is This Another Rally Within the Downtrend?

A recovery has developed from the June 23rd low at 55.589, driven by short‑term over‑extended downside conditions, but traders may now be assessing whether this is simply a limited rally, or the start of a positive sentiment shift capable of producing a more extended phase of strength.