Mapping the Market: More frustration for silver as lows beckon

By Robert Fullem Sept 2 (Reuters) -

Silver has endured a brutal year, plummeting 55% ​at its extremes, and technical analysis suggests worse ​may lie ahead. Click here for ‌a more ​detailed chart.

A devastating three-day crash of 41% in late January triggered a downward spiral from which the precious metal has struggled to recover. Since then, ‌the story of silver's decline has been one of weakening rebounds. Each attempt to bounce back has failed to reach the previous high — a pattern that concerns technical analysts.

Most recently, silver tried and failed to surpass ‌the June 17 peak of $71.54, according to LSEG data, after bouncing from July's low of $54.74. This repeated failure ‌to recapture lost ground suggests sellers remain in control. Technical analysts watch previous highs and lows closely as they often slow or accelerate price movement. The June 17 high carries extra weight because it aligns relatively closely with the halfway point of the May ⁠13-July ​17 fall. Such retracements, as ⁠they are known, can also be turning points for the market.

Silver's current predicament hinges on support near $62.54 and $56.54. If these levels ⁠hold, bulls might attempt another push toward $71.54. Breaking above the $70 to $80 range — an area crowded with previous highs and lows — ​would be needed to target May's high of $89.36. However, a breach below $54.74 would open the door to ⁠deeper losses at $48.60 and then $45.51.

For silver investors, the near-term outlook remains challenging, with the metal caught in a precarious position between fighting for ⁠recovery ​and risking further declines. What the chart shows:

(Mapping the Market is a daily column written by Reuters journalists. The commentary is based on a technical ⁠analysis of financial charts, which ⁠helps assess the likelihood of future price moves but does not guarantee the outcome. The column does not constitute investment advice or trading recommendations. ) (Robert Fullem is ‌a Reuters market ‌analyst. The views expressed are his own. Editing by ​Burton Frierson and David Gaffen)