Silver Price Analysis – Silver Continues to Move with Rates

Silver Technical Analysis

The silver market has fallen pretty significantly during trading here on Friday as traders reacted to interest rates screaming to the upside after the jobs number in the United States came out much hotter than anticipated. In fact, basically doubled expectations, and the markets reacted accordingly.

So, with that being the case, it’s not a huge surprise to see that silver fell, after all, silver is a non-yielding asset, so it tends to react very poorly to rates rising. We find ourselves hanging around the $70 level and the $70 level is the bottom of a major consolidation area. We’ll just have to wait and see whether or not that ends up being the case. I would look at this potential bounce as a short-term buying opportunity, but I also would be very cautious about getting too aggressive in this market, as volatility continues to be a major issue.

Potential Support and Downside Risks

If we were to break down below the 200-day EMA just below, then I think you have the possibility of a market really starting to fall apart, maybe heading to the $60 level. This would be a massive move and would change a lot of things out there.

That being said, keep in mind it was non-farm payroll Friday and therefore liquidity might have been a little bit of an issue, and the overreaction typically gets fought back against. So, with that, I like the idea of perhaps just looking at this as a potential buy opportunity, but I need to see the bounce first. I want to get on the right-hand side of the V.

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