Silver Price Analysis – Silver Continues to React to Rate Moves

Silver Technical Analysis

The silver market has rallied a bit during the trading session on Wednesday as rates are starting to roll over just a bit. That does give a little bit of strength for silver. I think silver probably has a short-term bounce in it. I would watch the 50-day EMA above for potential resistance, and of course the $80 level, an area that has been a bit of a barrier as well.

If we can break above there, then it opens up the possibility of a move to the $90 level. Ultimately, I think the markets are likely to continue to see more of a sluggish performance.

I think ultimately this is a market that needs to see some type of conclusion to the noise in the Middle East in order for interest rates to drop, and then at that point we could start to have a bit of a more supply and demand conversation because, quite frankly, there is quite a bit of demand out there and the supply is not anywhere near satiated.

Interest Rates and Non-Yielding Assets

So, I think given enough time, we do go higher, but as long as those interest rates continue to climb, it will work against the value of silver. That’s just the situation we’re in right now as silver is non-yielding.

If we were to break below the $70 level, watch that 200-day EMA because if that gives up its support, silver will plunge. If that happens, we could see a lot of negative momentum, as silver is volatile more often than not.

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