Silver: Too Pricey at $47.18? Market Needs a Shakeout for Better Entry
LONDON (September 30) Silver prices pulled back on Tuesday after hitting an intraday high of $47.17, narrowly failing to break above Monday’s $47.18 peak. The fractional miss prompted immediate profit-taking, suggesting that speculative interest may have temporarily exhausted itself after several sessions of headline-driven gains.
Spot silver dropped to a session low of $45.81 before rebounding to $46.20 early Tuesday. With the market unable to punch through a key resistance level, traders are now eyeing a potential correction.
The rally from $41.14 to $47.18 has left a 50% retracement level at $44.16, aligning with the previous breakout zone at $44.22 — making the $44.16–$44.22 range a high-probability value zone for dip buyers.
Gold’s Technical Reversal Adds Pressure to Silver
Daily Gold (XAU/USD)
Silver’s pullback is also being influenced by technical weakness in gold. Spot gold hit a record $3871.89 before reversing sharply lower, falling just shy of a major swing target at $3879.64. That reversal pattern may trigger a short-term correction in gold, with near-term support seen at $3794.70, and deeper targets at $3749.92 and $3742.36.
The correlation between the two metals remains tight, and gold’s failed breakout reinforces the view that the recent rally in silver may have run too far, too fast. As gold corrects, silver could follow, especially if momentum fades further.
Fed Rate Cut Bets Stay Firm, But Shutdown Threat Delays Data
Fundamentals remain supportive on the policy side, with traders pricing in an 89% chance of a 25 bp rate cut in October, per CME FedWatch, and 104 bps of easing through 2026. But political headwinds are emerging.
A possible U.S. government shutdown would freeze key economic data releases — including this Friday’s nonfarm payrolls — complicating the Fed’s decision-making and potentially stalling rate cut confirmation.
The uncertainty over whether key data will be available could slow market conviction in the near term, limiting follow-through on recent bullish momentum in silver.
Outlook: Look to $44.16–$44.22 as the Key Buy Zone
With the failed breakout at $47.17 and signs of short-term exhaustion, silver looks set for a pullback. Traders should focus on the $44.16–$44.22 zone — a confluence of technical support — as the next area of interest.
A hold here could reset the uptrend, but any break below opens the door to further downside toward $43.00. Until gold stabilizes and speculative froth clears, silver remains vulnerable to near-term selling.
FXEmpire
