Silver Price Forecast – Silver markets continue to trade range boundSilver markets have been very range bound over the last several sessions, and although Monday was positive, we remain in that range as I write this article.
Silver markets rallied a bit to kick off the week on Monday, but at this point the market participants don’t seem overly enthusiastic about putting a lot of money to work. The $14.30 level has been resistance, while the $14.10 level has been support. The $14 level underneath is even more significant support, based upon longer-term charts. Because of this, I think that the market is trying to decide what it can do next. This will either be a “rectangle bottom”, or it will be a pause before the next leg lower. If we break down below the $14 level, then the choice is obvious: we can only sell this market. However, if we can break above the $14.35 level, the market is very likely to go looking towards the $14.50 level after that.
A lot of this is going to come down to what the US dollar does, as per usual. Right now, European currencies are going better against the US dollar because of a statement from an EU official that suggested a Brexit could be realistically achieved within two months, which of course has people buying the British pound and the Euro. However, that doesn’t necessarily being that the US dollar is going to be on its back foot for long. It may be true for the British pound, but the Euro, which is roughly half of the US Dollar Index, might be a completely different story. At this point, I think the biggest driver of US dollar strength against precious metals would be the concern of struggling emerging markets. Until that clears up, silver is probably going to struggle to keep gains for large moves.