Silver Price Analysis – Silver Continues to be Sensitive to Yields

Silver Technical Analysis

The silver market has drifted a little lower during the trading session on Friday in the early hours as the interest rates in America rise. There’s a lot of concern out there due to stalemates, tensions between the Americans and the Iranians and as long as that’s the case, it’s very important to pay close attention to where the 10-year yield is going, which I use as a proxy for the overall interest rate market.

We’re well above the 4.30% level, an area that’s been important multiple times, so when I look at this to me, it seems as if it makes perfect sense that silver continues to drop.

Yield Correlation and Technical Support

I do see support underneath near the $70 level. That’s assuming we even get that far; that is a bit of a distance lower. Rallies at this point in time would almost certainly coincide with rates dropping in America, perhaps opening up the possibility of a recovery toward the 50-day EMA, maybe even the $80 level.

As things stand right now though, this looks like a market that just doesn’t have enough momentum to continue to go higher. I don’t think it’s a massive sell-off waiting to happen; I just think this is a situation where we’re just drifting with the latest headlines and the latest headlines, although not horrible, aren’t exactly encouraging either. With this, I would expect more choppiness ahead, and as a result, position sizing will continue to be the main focus of those dealing with this situation.

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