Silver Price Analysis – Silver Continues to Drop Early on Wednesday

Silver Technical Analysis

The silver market has pierced the $60 level, and now it looks like the $60 level being broken could open up a pretty significant drop. This could send silver down to $50. We have a little bit of support here all the way to the $58 level, though, so if we were to break down below there, then I think silver really starts to fall apart, probably at the hands of a strong US dollar.

Any bounce at this point in time, I think, after the last couple of days, I’m looking more or less at a bounce as an opportunity to start shorting signs of exhaustion. The 200-day EMA offers a bit of a barrier that would be surprising to break above, and probably would require a significant external factor to happen.

Dismantled Correlations and Technical Barriers

Really, at this point in time, we would need to see a massive change because rates are dropping in the United States, and the dollar still rises. We’ve completely dismantled the correlation between falling rates and rising silver. This was very reliable, but traders are starting to look beyond the war in the Middle East, changing the overall behavior of the silver market.

I think silver has further to go to the downside. It just looks limp. There’s no real attempt to turn things around, and therefore, I think you’ve got a situation where silver continues to just fall apart. Longer term, I do think that silver gets another bid as we saw a year ago, but the supply and demand situation isn’t really what people are focusing on right now.

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