Silver Price Forms Evening Star as Commodity Prices Sink

Summary:

In this silver price forecast, we explain why the metal's price has declined today and what to expect

The silver price is under pressure ahead of the latest FOMC minutes that will come out during the American session. The price has dropped to $27.8, which is slightly lower than this week’s high of $28.7. Other metals like copper, gold, and platinum have also retreated.

Silver news: Silver prices have declined today as traders wait for the minutes of the FOMC. The minutes will show the Fed’s thinking when it made its recent interest rate decision. In it, the bank left interest rates and quantitative easing unchanged. The minutes comes at a time when there are fears of inflation.

In the United States, the headline inflation rose by 4.2% in May. And in the UK, data showed that prices doubled in April as the country continued its recovery process. Therefore, there are concerns that most central banks will enter a phase of recovery tightening to curb inflation. Such a move will, in theory, be bearish for silver prices because it will push the dollar index higher.

Silver price forecast

The daily chart shows that the silver price formed an evening star pattern on Tuesday this week. In price action, this is usually a sign that an asset’s price will turn bearish. Worse, the star was followed by a sharper decline. The price remains inside the ascending channel that is shown in black. It has also risen above the 25-day and 50-day exponential moving averages (EMA), which is usually a bullish sign.

Therefore, in the near term, there is a possibility that the metal will keep falling as bears target the lower side of the channel at $28. However, a move above the upper side of the evening star pattern will invalidate this trend.