Silver Approaches Key Support Ahead of Next Move

• Silver recently experienced a sharp selloff in paper markets, but Chinese demand quickly stepped in to absorb the pressure. Chinese pricing closed above $55, while U.S. CFD pricing currently trades near $52.85—a notable divergence that highlights regional demand strength.

• The metal is now testing a critical support arc while digesting its recent rally. This consolidation phase suggests silver may need more time to stabilize before resuming its upward trajectory. China’s aggressive physical buying has acted as a stabilizing force, preventing a deeper correction and mitigating what could have been more significant downside after the paper-driven selloff.

• The silver market remains sensitive to geopolitical conditions, industrial demand, and shifting monetary policy expectations. Major price moves affect mining output, manufacturing supply chains, and broader market dynamics.

• Technically, silver is moving along a rising trendline, supported by bullish-sloping moving averages (SMA 50, SMA 70, and SMA 210). RSI sits around 47, indicating neutral momentum, while the MACD shows early signs of curling upward—hinting at potential recovery.

• Traders are watching for the development of a cup-and-handle formation, often a precursor to bullish continuation. With China reinforcing demand and the technical setup remaining constructive, silver may be preparing for its next major move once consolidation completes.

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Source: TBones