Silver prices reversed sharply Friday after hitting a two-month peak of $71.12, plunging below $69.00 following hawkish remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium. The precious metal’s false breakout caught momentum traders off guard as Warsh’s comments triggered a surge in US Treasury yields, strengthening the dollar and pressuring non-yielding assets.
The swift reversal represents a significant technical failure for silver bulls who had anticipated a sustained rally above key resistance levels. Traders holding long positions from the recent climb likely faced substantial losses as the metal shed gains within the same session. The move underscores silver’s heightened sensitivity to Fed policy signals and dollar strength.
Market participants are now reassessing precious metals positioning as higher Treasury yields increase the opportunity cost of holding non-interest-bearing assets like silver. The breakdown below $69.00 could trigger additional technical selling if support fails to hold.
FXnCO Insight
Silver traders should monitor the $69.00 level closely as a failure to reclaim this threshold could accelerate downside momentum toward $67.50, while Fed commentary remains the dominant catalyst for precious metals direction.
Source: FXStreet