Silver Price Analysis – Silver Continues to React to Rates

Silver Technical Analysis

The silver market has struggled a bit in early trading on Monday as we continue to see a lot of noise in general. Quite frankly, this is a market that I think given enough time probably will retest the $70 level again, especially if interest rates in the United States continue to climb.

I don’t necessarily want to short silver; I just recognize it’s probably not the best time to buy it if rates continue to cause headaches. This is common for this market, but right now, it’s especially problematic.

Geopolitical Impact and Interest Rates

Across the wires, we are hearing stories that perhaps the Iranians have attacked a vessel in the Strait of Hormuz, so that could drive rates higher yet again. If that’s the case, it will work against silver. Testing the $70 level is something that we’ve done multiple times; it wouldn’t surprise me at all to see that play out here as well.

If we do rally, the 50-day EMA continues to offer a little bit of resistance, but I also think the $80 level just above there is probably your short-term ceiling. Silver is extraordinarily volatile, so position sizing is something that you need to be very careful with, as massive losses can happen quickly in this asset.

You do not want to get aggressive, but a break above the $80 level could sound the all-clear for an even bigger move to the $90 level. Expect choppy and noisy headline-driven nonsensical behavior out of silver, as these headlines can come out at any time. Safety for your trading account is paramount.

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