SLV silver price regains pace as AI stock valuations heighten fear

SLV silver ETF, which tracks the performance of the silver bullion, bounced off its one-week low as the bulls strive for a rebound. A risk-off mood has sustained the derivative on an uptrend as the prolonged US government shutdown clouds the outlook on the Fed’s next course of action. Concerns over AI stock valuations have further fueled the demand for safe-haven assets.

US stocks selloff bolsters SLV silver price bounce-off

After hitting fresh levels and trading within the overbought territory for several weeks, silver price corrective pullback was just a matter of time. However, the highly expected decline did not signal the end of an uptrend. In fact, there lay an opportunity for those who missed out on the previous rallying. 

On Tuesday, SLV silver price bounced off a crucial support zone; signaling the continuation of an uptrend. In terms of the fundamentals, a risk-off mood has fueled the rebound. 

Fear levels in the broader financial markets have intensified to an extreme fear level of 23 compared to the previous session’s 44. This follows the rising concern over AI stock valuations. The S&P 500 and Nasdaq Composite dropped by over 1% as AI-related companies like Palantir and Oracle led the sell-off. 

At the same time, the prolonged government shutdown has blurred the outlook on the Fed’s next course of action. Investors have had to look for signals from other areas in the absence of an official US jobs report for the second time in a row. 

Among the warning signs are the significant layoffs reported by major companies like Starbucks, Amazon, and Target. As a result, the market is on high alert for signs of further pressure on the US labor market. In addition to its status as a safe-haven asset, silver price would benefit from a cooling job market as the Fed announces further rate cuts.

SLV silver price technical analysis

SLV ETF price chart | Source: TradingView

SLV silver ETF has reversed most of the gains recorded last week as the bulls strive for a rebound. After an inevitable corrective pullback from the all-time high hit in mid-October at $49.22, the derivative has entered into range-bound trading. 

On Tuesday, it bounced off the crucial support zone of $42.50. At the time of writing, it was trading at $43.39; slightly below the short-term 25-day EMA. Notably, the bullish trend line that previously limited its upside has become steady support in its fresh uptrend. 

For as long as SLV silver price holds steady above the medium-term 50-day EMA, the trend line highlighted in blue will bolster its rebound towards $45 and beyond. More specifically, the range between $42.50 and $44.50 will be worth watching in the ensuing sessions. On the flip side, a further pullback will likely activate the support level along the 50-day EMA at $41.66; placing the price back within the bullish channel.