The silver price has gone on a rollercoaster ride in the past week. Although the overall uptrend hasn’t been effectively broken, the recent market dip certainly spooked some speculators.
It appears that most of the markets went through this type of dip in the past few days. Not all markets were affected on the same day, however.
Silver Price Dips Hard
After a very bullish period for all precious metals, a minor market retrace was bound to kick in. For the silver price, the price dropped to a low of $17.67 per ounce. Not necessarily a steep decline, albeit the price went nearly vertical after hitting a peak of $18.8.
Given the bullish momentum throughout the first half of January, this retrace was coming sooner or later. Some speculators expected silver to challenge its recent all-time high, but that has not happened yet. Overall, the surge from the low $16.5x range to $18.4 has been a pretty solid one.
The expected dip has now occurred and has turned into a new support level being established near $17.8 Since hitting that low, the silver price has resumed its overall uptrend without missing a beat. Most speculators will be happy with the way things have gone since then.
XAG/USD Technical Indicators
Moving Averages: For silver, there appears to be some bullish momentum left in the tank. The MA20 remains above the MA50 as a new bullish crossover has been formed in the past day. That would indicate that the silver price will remain in the green, at least throughout today.
Fibonacci Retracements: In terms of Fibonacci retracements levels, things get very interesting for silver. For now, it appears that the 50% level will act as support and prevent a further price decline. That is crucial, considering how the 61.8% level is coming into play as well.
If the uptrend is rejected at this level again – which sits near $18.045 – there is a chance the downtrend will continue over the next few days. So far, the support candle is bigger than the previous red candle, indicating that the uptrend is not over just yet.
RSI: Silver has remained very close to the “average’ level in terms of RSI. There is no oversold nor overbought territory in sight at this time. On its own , the RSI would indicate that the price uptrend can continue without a hitch. Confirmed with the other indicators, one could easily see there is reason for cautious optimism.