Silver Price Analysis – Silver Looking for Momentum After Stabilizing

Silver Technical Analysis

The silver market has dropped a little bit during the early trading session on Tuesday, dropping below the $70 level before finding buyers yet again. The hammer from the Monday session was rather impressive and it got a lot of people excited, so the Tuesday session has shown itself to try to at least do the same thing.

Breaking above the top of the $70 level opens up the possibility of moving toward the 50-day EMA, which is sitting right near the $80 level. The markets continue to see a lot of volatility due to the situation in the Middle East and whether or not risk appetite will be destroyed.

Geopolitical Volatility and Yield Headwinds

Furthermore, you have interest rates in the United States climbing and that works against silver, not only because it raises the US dollar, but it is a situation where traders will be looking at this through the cost of carry and through the cost of storage. Maybe it is too expensive when you can get a large amount of return on the bond.

The silver market I think continues to be very volatile and we look at this through the prism of trying to recapture the previous consolidation and from a structural standpoint it looks like we are trying to do that. That being said, I think this would be more of a risk-on move, so we probably need to see this coincide with the war cooling off.

That might be enough to get silver racing higher, at least for a short-term trade. If we break down below the lows of the Monday sessio,n I think we will probably fall apart and start heading towards the $50 level.

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