Silver Price Analysis – Rounding Bottom Pattern Threatens $70 Barrier

Silver

The silver market has gapped higher to kick off the trading session on Thursday, showing signs of strength again, although we have wavered a little bit since we opened up. The reality is we are above the 200-day EMA, and that could be bullish for some traders.

Ultimately, this is a market that has been consolidating for quite some time after a recent breakout, and now it looks as if we are trying to do what we can to continue going higher. The momentum is driven at the moment by Treasury buybacks, and the falling US dollar; rates rising is a bit counterintuitive, but stress could have positive effects as well.

Rounding Bottom Pattern

The $70 level above will attract a lot of attention as a large, round, psychologically significant figure and an area that’s been important a couple of times in the past. With that, it’s likely that traders are eyeing this market quite interestingly and closely right now, as there is so much going on at the same time.

The technical pattern looks like a rounding bottom. I remain bullish of this market, despite the fact that rates are jumping, because rates are jumping as an anti-U.S. dollar type of trade, which can be fruitful for silver. This market currently is noisy, but the buyers have made a strong statement.

Short-term pullbacks interest me, at least until we break down below the 50-day EMA. At that point in time, I will be looking to see if support holds near $65. This is an area that if it gets broken, could send the market reeling.