Silver Price Outlook – Silver Continues to Consolidate on Friday

Silver Technical Analysis

The silver market has rallied slightly during the trading session on Friday in early trading as the $47 level continues to be an area of interest and support. That being said, market participants continue to see a lot of back-and-forth behavior, with the 50-day EMA underneath offering a certain amount of support. Silver, of course, had a huge run to the upside for quite some time, and I think you need to look at it through the prism of a market that may have gotten a little bit overdone.

With that, the massive sell-off from $54 to $47 in a very quick flash has shocked the market. Now we’re trying to determine whether or not we can just sit here and hang out in the $47 region. To be honest with you, the best thing that could happen for this market is for it to go sideways for a while and just accept this price. That would allow it to work off some of the excess froth that had been thrown into the market, and by doing so, people would become more comfortable with these prices, potentially sending silver higher.

If we were to break down below the 50-day EMA, then it’s possible that silver could plunge toward the $40 level. Whether or not it has topped out completely, we don’t know yet, but I do suspect that, in the best-case scenario, this market probably moves sideways for a while. This would allow traders to feel more comfortable with the idea of silver being priced as high as it is at the moment.

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