Silver Technical Analysis
The silver market continues to sit just above the $60 level, a large, round, psychologically significant figure that has attracted a lot of attention as of late. It looks as if it has support down to the $55 level, a zone of demand, so to speak.
The Yields Won’t Stop Climbing
One of the biggest problems silver has right now is that yields won’t stop climbing. In the United States, early in the Wednesday session, we’ve seen 5.333% on the 10-year yield. With that being the case, it does put downward pressure on non-yielding assets such as silver. This is a long-held correlation that is still playing out at the moment.
Despite the fact that there is a major deficit in what we produce compared to what is expected to be demanded, this is a longer-term story when it comes to silver. If we were to break down from here, it’s really not until we clear $55 that I feel like shorting this market because of said demand. But that doesn’t necessarily mean that we’re going to bounce from here either. In other words, we may be a bit “stuck” in this range at the moment.
We need some time for relief in the rate market and perhaps some shrinking of the U.S. dollar. Right now, it doesn’t look like we have a whole lot of hope in that situation, despite the fact that we have a nice technical setup from a support, resistance, and possibly consolidation type of play. But right now, we need those rates to drop before silver can shine.
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