Silver Price Outlook – Silver Continues to Consolidate

Silver Technical Analysis

This is a market that I think continues to see a lot of noisy behavior, with the $70 level being something that I think we will have to keep an eye on. If we were to break down below the $70 level, then that changes a lot of the outlook, but it does not necessarily change the trend.

Keep in mind that if we break down below the $70 level, then we could go looking to the $65 level, possibly even $60, where the 50-day EMA is. I do think we only have 1 or 2 opportunities here for movement. One of them would be sideways action and perhaps try to burn off some of this momentum, or we get a significant pullback. We will just have to wait and see how that plays out because an impulsive move to the upside, I think, is probably one of the last moves you want to see.

Market Momentum and Risk

It is not that it is impossible; it is just that keeping up that type of momentum is going to be very difficult. It is a widely known thing that silver is a thing at the moment as far as traders are concerned. That being said, this will eventually end poorly; these things always do. It may even end poorly without changing the trend. That is what will get a lot of traders.

Think of it: you could see silver drop $20 and it would still be at $53, which just 6 months ago was somewhat unthinkable. So, in that environment, you would see the leverage wipe out most retail traders. The clue here in the analysis is that we could go down pretty steeply because of this. You have to keep your position size reasonable. I do not want to short this market, but I do think that you have a scenario where you eventually get a little bit of a pullback you can buy into, or we go sideways for a while and work off this excess froth. If we go straight up in the air, that is just going to make it that much worse when the bubble bursts. I am aware of all of the stories of silver in the physical form running out, but eventually, this thing comes to a head.

For a look at all of today’s economic events, check out our economic calendar.