Silver Price Outlook – Silver Continues to Consolidate

Silver Technical Analysis

The silver market has been all over the place during the pre-market trading on Monday, as we are trying to sort out whether or not the 50 day EMA is in fact going to hold. The area just above, the $37.50 cents level, is the previous consolidation area that we had been in, and we have to ask questions as to whether or not we are going to break into that area. Ultimately, this is a market that given enough time, should see a significant move. But right now, I still favor the upside. I just recognize that things have been a little bit choppy and noisy.

The US dollar has a negative correlation to silver, so it’ll be interesting to see how that plays out. After all, the market has an attitude to it that still favors the overall precious metals markets trying to rise, but we are in a very quiet time of year, as summertime is low volume. So, I think that is part of what’s going on here, but we are currently testing this previous kind of noisy consolidation area. And I think if we can break above the $37.50 level, then I get bullish.

In the short term though, I wouldn’t be surprised at all to see just some sideways action here. If for some reason we break down below $35.50, then I could start to think about becoming bearish, but this is still a very bullish market despite the fact that we’ve seen a pretty brutal beating over the last couple of weeks, as we are nowhere near changing the trend.

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