Silver Price Analysis – Silver Drifts Lower as Interest Rates Stay Elevated

Silver Technical Analysis

The silver market has pulled back just a touch during the early part of the trading session on Monday after initially gapping ever so slightly higher. There is a correlation over time between interest rates and silver, and as interest rates fall, typically that makes silver a little bit more attractive because it’s a non-yielding asset. Nonetheless, interest rates are higher than usual right now, and that has been a major problem.

Furthermore, there is a lot of demand for silver around the world in the real world, not the financial world. And while that will find its way into the markets eventually, the reality is there are a lot of questions about the Strait of Hormuz being shut down and what it does to the overall global economy. Because of this, you will have to be very cautious with silver, as is typical. It’s normally pretty noisy.

Key Support Floors and Historical Resistance Levels

The $60 level, at least right now, seems to be offering a bit of resistance, and we have the 50-day EMA at $63.45 offering a bit of a barrier. If we break down from here, the $55 level has offered support as of late, and a breakdown below that level would be a psychologically negative turn of events.

Silver could test the $50 level, which is an area that previously had been major resistance going all the way back to the late 70s when the Hunt Brothers tried to corner the market, the physical market. We recently broke through there, so a retest of that wouldn’t be the strangest thing to see. So, I am watching that as well.

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