Silver Price Prediction – Prices Rise and are Oversold but Remain in Bear Flag Pattern

Silver prices rebounded from support on Wednesday, recapturing resistance levels. Prices are still forming a bear flag continuation pattern. The inability of silver prices to gain traction while the dollar is rallying is an ominous sign for silver prices.  U.S. Treasury yields moved lower despite a stronger than expected Pending Home Sales report and a robust ADP private payroll

Technical analysis

Silver prices dropped but held support as the bear flag continuation pattern continued to perpetuate. Prices recaptured short-term resistance, which is now short-term support which is seen near 25.92. Resistance is seen near the 100-day moving average at 26.54. Additional support is seen near an upward sloping trend line comes in near 25.25. The short-term trend is downward sloping as the 10-day moving average recently crossed below the 100-day moving average. Short-term momentum is positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 19 below the oversold trigger level of 20, which could foreshadow a correction.

Pending Home Sales Rose More than Expected

According to the National Association of Realtors, pending home sales, which measures signed contracts on existing homes, rose 8% in May compared with April. Analysts expected a 1% drop. This level is the highest level of sales activity for May since 2005. Sales were up 13% from May 2020, when the housing market was beginning to come back from the coronavirus lockdown.