Silver jumped 4.5% on its largest one-day advance since August 19, as falling US Treasury yields lifted the metal above a cluster of key technical levels. The 100-day moving average near $66.75 now stands as the next upside target.
Silver raced higher, gaining 4.5% in its largest one-day advance since August 19. Lower US Treasury yields helped drive the move, but the technical picture had also turned more bullish after sellers repeatedly failed to keep the price below key support.
The 30-year Treasury yield fell close to 6 basis points to 4.944%, while the 10-year yield dropped 4.6 basis points to 4.681%. Lower yields reduce the opportunity cost of holding non-yielding metals such as silver. A softer US dollar and a pullback in oil also supported the precious-metals complex.
Sellers fail to hold the 50% retracement
Silver had been correcting in an up-and-down fashion since reaching $71.16 at the end of August. During that correction, the price tested and moved below the 50% retracement at $62.92 three separate times this month, including after the FOMC decision. Each time, however, the price quickly reversed back above the level.
That failure mattered. When a market repeatedly breaks below a retracement level and cannot stay below it, sellers can become frustrated. As they cover positions and buyers step back in, the failed break can become the catalyst for a move the other way.
Buyers clear the resistance cluster
The rally started with a move back above the 100-hour moving average at $63.86. Buyers then pushed above the 61.8% retracement at $63.95 before extending through the 38.2% retracement at $64.85 and the 200-hour moving average at $64.90.
Moving above that area gave buyers more control and helped accelerate the upside momentum. Silver traded as high as $66.17, leaving the 100-day moving average near $66.75 as the next key target.
What comes next for buyers and sellers
For buyers, the roadmap is straightforward: stay above the $64.85 to $64.90 area, then make a run at the 100-day moving average at $66.75. A sustained move above that level would strengthen the bullish bias and give buyers more control.
Sellers, meanwhile, must first push the price back below the $64.85 to $64.90 area, putting the 61.8% retracement at $63.95 and the 100-hour moving average at $63.86 back in play. A break below those levels would then shift focus back toward the 50% retracement at $62.92.
Source: Investinglive
Trading involves risk.
Risk Disclaimer
