Silver Weekly Price Analysis – Silver Struggles for the Week

Silver Markets Weekly Technical Analysis

Silver gapped lower to kick off the trading week and then bounced around quite a bit as the interest rate markets continued to have a major influence on what happens. With rates rising, that really puts a damper on an asset like silver, as it is non-yielding and therefore it needs something to propel it along.

As things stand right now, the thing that seems to be moving silver more than anything else are higher rates and it’s moving them down. The higher rates come from the idea of energy inflation, which, of course, means that the Federal Reserve will have to stay tighter for longer. That’s actually pretty toxic for silver, and other non-yielding assets for that matter.

Supply Dynamics and Technical Levels

The supply and demand equation for silver certainly is favorable, and I do think eventually we will get back to that. But as long as there are concerns about energy supply in the Middle East, you’re going to have a situation where silver is going to be choppy at best. Keep your position size reasonable because these moves are quite often sudden and can be somewhat extreme at times.

That’s really the only recourse you have for something like this, other than completely avoiding the market altogether. It’s worth noting that the $70 level does look to be somewhat supportive and that’s an area where we have bounced from this past week. The $80 level above has been resistance, followed by the $90 level. It is a very technical market but right now, like I said, the main correlation is if interest rates rise, silver falls.

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