Silver Price Forecast – Silver Continues to See Overhead Pressure

Silver Markets Technical Analysis

Silver rolled over a bit during the early hours on Tuesday as the $28.50 level continues to be a significant barrier. This is a zone of resistance that extends to the $30 level, and I’m watching this very closely because you can see going back several years, it has been important. This is an area that if we break above could really lead to some type of massive melt up in the silver market.

This isn’t to say that I’m looking to short silver, at least not yet, but silver is a different animal than gold and I think a lot of people forget that. Quite frankly, yes, it’s a precious metal, but it’s more of an industrial metal than anything else.

In that sense, it could be thought of more along the lines of copper, quite frankly, with a little bit of the precious metal attitude thrown into it. The central banks around the world continue to buy gold, and that has dragged silver right along with it. But ultimately, I think sooner or later, you have to look at the economic demand for silver. Whether or not it will pan out remains to be seen, but I see a situation where we could very well pull back to the $26 level.

At that area, if we don’t hold, then the uptrend’s over and we go falling back into the previous consolidation region. The area above is going to be very difficult to continue to see silver go higher. And commercial contracts in the futures markets certainly are skewed to the downside because of this, if you’re looking to play the precious metals.

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