Silver Price Analysis – Silver Tests 200-Day EMA as $55–$60 Floor Holds

Silver

The silver market has been slightly positive during the early part of the Monday session as we continue to hang about the 200-day EMA, which has caught my attention.

The 200-day EMA is an indicator that a lot of people pay close attention to, and the fact that it has caused a little bit of resistance isn’t a huge surprise to me, just as the 50-day EMA sitting just below has offered a bit of support.

Ultimately, this is a market that tends to be very sensitive to the U.S. dollar, risk appetite, and interest rates. So, with all of those in play at the same time, it’s not a huge surprise to see that this recent bounce, although impressive, has failed to really follow through with a larger move.

Geopolitical Risks, Demand Outlook, and Support Floors

I think there are a lot of questions out there right now as to where certain things go, the Middle East for example, and therefore the idea of trading silver in massive quantities probably scares a lot of traders.

Ultimately, this is a market that has a lot more demand than supply going forward, so longer term I like this market. But right now we have so many moving pieces that it’s difficult, I think psychologically for a lot of people, to get aggressive here.

The question I have at this point is: would the area between $55 and $60 end up being a floor? I think that’s what’s trying to be settled right now, and could take a while in this environment.