Silver Approaches Key Level by StockNews
© Reuters. Money is approaching the key level
It was another tough week for the precious metals sector, with the Silver Price (SLV) plunging more than 4% to break above the $ 23.00 / oz level, extending its losses since the start of the year to almost 14%. Taylor Dart explains why the metal needs to maintain its support level. It has been another difficult week for the precious metals sector, with the price of silver (SLV) plunging more than 4% to break above the $ 23.00 / oz level, extending its year to-date of losses. at nearly 14%. This made silver one of the worst performing asset classes of the year behind solar ETF (TAN) and palladium (PALL), with silver now among the ten worst performing ETFs since. the beginning of the year. The silver lining is that the metal is oversold in the short term and sentiment is at its worst level in years, but while this provides the conditions for a sustainable bottom, the key for the bulls will be to defend the 22 level. .00 $ / oz at any cost. A breakdown below this level would be a bearish development for silver and silver miners. Let’s take a closer look below:
(Source: Daily Sentiment Index data, author’s chart)
Despite some of the highest inflation readings in a decade, precious metals have been anything but a sanctuary, currently registering as the worst performing asset classes of 2021. Unsurprisingly, this has dramatically reduced the readings of the bullish sentiment, with silver now one of the most hated asset classes on the planet from a sentiment perspective. This is evidenced by silver’s long-term moving average for bullish sentiment falling below 24% this week, the lowest reading for this indicator in nearly three years. The last time an asset class became so hated was (USO (NYSE :)) in April 2020, and as oil fell 5%, April ended up being a major low for the raw material. There is obviously no guarantee that history will repeat itself with money, but when an asset becomes so hated, it is wise to be open-minded to signs of a bottom. However, while sentiment will eventually shift to a short-term buy signal on Friday, September 17th, the technical situation remains under pressure and still sits just outside a key oversold area.
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