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Silver Price Forecast – Silver Continues to Show Volatility

By:
Christopher Lewis
Published: May 20, 2024, 13:36 GMT+00:00

Silver continues to look very volatile, as the market initially shot higher in premarket trading, but has since fallen completely apart. We are overbought, and this could cause a massive unwind at this point.

Silver Markets Technical Analysis

Silver seems to be discovering gravity, and with the short squeeze, it’s hard to tell whether or not it’s over, but clearly, this is a shot across the bow. It’s probably only a matter of time before we see a significant pullback, and it is worth noting that by the time the futures markets opened up, we had dropped $1.50 from the highs in premarket electronic trading. So, what does this mean? Well, it means that silver is overbought, and people are starting to recognize that. I mean, imagine getting silver at $26, which would have been the perfect entry. And then suddenly find yourself up six and a half dollars on a silver contract, which of course is an extraordinarily huge profit.

With that, it looks like there’s been some major profit taking and it’s worth noting that we were well above the overbought condition in the relative strength index. So, with all that being said, it’s not a huge surprise that this parabolic move is starting to pull back. Whether or not it’s the end of the trend, we will have to wait and see because these are always difficult to deal with. But I do think that there is a significant amount of support underneath near the $30 level. So, I would be particularly interested in a pullback to that area and perhaps signs of support. Furthermore, you have to pay attention to the US dollar and what it’s doing, because it will obviously have a major influence on what happens with the silver market as well.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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