Since reaching a bottom in the first week of March, the silver spot price (XAGUSD) has soared over 19%, as traders flocked to the precious metal for safety against the turmoil in the market triggered by the collapse of Silicon Valley Bank. However, as the market calms, the improving risk sentiment threatens the bulls’ reign in the silver market. 

Silver is notoriously volatile, and with the economy showing signs of a slowdown, waning industrial demand could act as another tailwind to the upside potential. Traders are shifting back into riskier assets, making safe haven metals less desirable. However, silver has yet to reflect these changes in its price, keeping traders on edge in anticipation of the potential turnaround.  

Technical 

The spot price is still in the process of retracing the selloff that led to the March bottom, breaking through the 61.8% Fibonacci retracement at $23.09 per ounce and showing no signs of slowing, with technical indicators signalling continuous bullish momentum on the 4H chart. However, the RSI points to potential divergence in the market, which could signal a reversal.  

With momentum holding, silver could test the 78.6% Fibonacci retracement at $23.78 per ounce before reversing to retest the uptrend at $23.41 per ounce. If support fails, a breakout from the downtrend could lead to another leg down to $23.09 per ounce and $22.61 per ounce if fundamentals continue to favour riskier assets. 

Summary 

While the bulls have control of the silver market, indicators point toward a possible reversal. The bulls could ride their momentum toward $23.78, where the turnaround could be on the cards toward $23.41. 

Sources: Koyfin, Tradingview, Reuters