Silver Price Analysis – Silver Continues to Rally on Tuesday

Silver Technical Analysis

Silver has rallied yet again during the trading session here on Tuesday as the US dollar finds itself on the back foot. That being said, we are now challenging the $95 level, and I think at this point it’s pretty obvious we’re going to test $100 before it’s all said and done.

Short-term pullbacks continue to offer buying opportunities in a market that has just been parabolic. I do think this is a market that will wipe a lot of people out eventually. Something is going to happen to turn all of this around; it always does. And at that point in time, you’ll probably see a lot of FOMO come into the markets, and unfortunately, that will be the end of a lot of accounts. So by all means, be cautious.

This is an exciting market for those who have never seen something like this. In the past, I’ve seen other commodities do this. Oil’s the first one that I can think of. At one point, oil was something like $160 a barrel, give or take a few dollars, and you can see what happened there. If oil can do that, then most certainly Silver can because oil is in much more demand.

Eventually Something Breaks

That being the question, now what can we do about supply? I think eventually something breaks in this market, and we get a vicious pullback. Now, longer term, I think we have a higher floor in the market, and we’ll have to discover what that is, and that will be a brutal move. In the short term, buying the dip is the only thing you can do.

Longer term, though, I do worry about this one having so much leverage in it. It is probably going to wipe out a lot of accounts. You will go to buy the dip, be over-leveraged, and that will be the last dip for say six months. So, be cautious, recognize we’re probably going to the $100 level, and that’s an area that I think would cause a lot of psychological resistance.

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