SLV ETF analysis: Silver price fatigue or momentum buildup?

The SLV ETF has shown resilience; capitalizing on the gains from late last week when it bounced off its one-month low. By attracting more buyers, the bulls are an inch closer to breaking the support-turn-resistance zone of $47. 

While concerns over the health of top economies are weighing on the metal’s industrial demand outlook, its safe-haven appeal remains steady. Besides, bets that the Fed will cut interest rates in December appear to be higher.

Here’s Why the Bulls are Overlooking the Technicals-Backed Price Fatigue

The SLV ETF, which tracks the performance of the silver bullion, bounced off the short-term MA as the bulls strive to break the two-week range and retest November’s high. On the one hand, concerns over the health of top economies, including the US and China, are weighing on the white metal’s industrial demand outlook. 

However, these woes have been offset by optimism on additional stimulus measures by the Beijing administration in an effort to alleviate its struggling property market. The proposed measures include lowering home sales’ transaction costs and offering huge income tax rebates for the borrowers. 

Besides, the policymakers are considering subsidizing mortgage payments in order to attract more buyers. If approved, these stimulus measures are set to bolster the demand for industrial metals like silver and copper. 

Read more: Goldman Sachs’ Struyven sees gold hitting $4,900 on central bank and Fed tailwinds

At the same time, persistent fear in the broader financial market has steadied silver’s safe-haen appeal. Despite the recorded improvement, the fear & greed index is still at extreme fear at 13. This is in comparison to last week’s 11 and last month’s fear level of 33.

SLV silver price is also reacting to the increasing bets that the Federal Reserve will lower rates in its December meeting on the back of a slowing US labor market and stubbornly high inflation. While some Fed officials, like Fed Governor Christopher Waller, are dovish, some have contrary opinions on the matter. 

SLV silver price technical analysis

SLV silver price has been moving back and forth in recent sessions as the market digests mixed signals. At the end of last week, the ETF dropped to a one-month low at $44.83; moving slightly below the short-term 25-day EMA. It has since bounced off that support zone to trade close to the upper limit of the two-week range at $46.63 as at the time of writing.

On the one hand, the formation of the bearish double-top pattern as seen on its daily chart points to fatigue. However, the sellers remain cautious as the bullish trendline continues to offer steady support to the asset. 

With the US Thanksgiving holiday, it is likely that the second half of the week will have less participation. Nonetheless, the bulls remain in control for as long as SLV silver price holds steady above the bullish trendline highlighted in blue. 

More specifically, the range between the support zone of $44.61 and the resistance at $47.03 is still worth watching. With further rebounding, the ETF will likely face resistance at $48. For as long as SLV ETF price holds steady above $44, this thesis will be valid.