Silver Price Analysis: XAG/USD tanks towards $31.00 as ‘evening star’ emerges

• Silver prices tumbled even though US bond yields fell.
• The formation of an ‘evening star’ can pave the way to challenge lower prices.
• XAG/USD to consolidate around $31.00 if buyers hold firm around the latter.

Silver prices dropped from daily highs that had reached around $32.09 earlier, even though US Treasury bond yields tumbled. A late recovery of the US Dollar, trimming some of its losses, weighed on the grey metal, which is down more than 2.80%. At the time of writing, the XAG/USD trades at $31.06 and falls to three-day lows.

XAG/USD Price Analysis: Technical outlook

After rallying toward the year-to-date (YTD) high of $32.51, the non-yielding metal dipped to $30.05 before launching another attack toward the YTD highs. However, bullish momentum seems to be fading, as depicted by the Relative Strength Index (RSI), which, despite remaining above the 50-midline, aims lower, showing sellers’ strength. Alongside that, the formation of an ‘evening star’ hints that a further downside is seen.

 If XAG/USD drops below $31.00, further losses lie beneath. The next support would be the May 24 latest cycle low of $30.05, followed by the April 12 high of $29.79. Once cleared, the next stop would be the $29.00 psychological level.

On the flip side, if buyers keep silver spot prices above $31.00, that would pave the way for consolidation, around the $31.00/$32.00 range.

XAG/USD Price Action – Daily Chart