Silver Price Outlook – Silver Continues to Flounder in Consolidation

Silver Technical Analysis

The silver market has been slightly negative after trying to rally on Friday, and at this point, it’s obvious that the market sees some resistance near the $49 level, which we had seen previously. The market pulling back from here opens up the possibility of a move down to the $47 level. Ultimately, this is a market that will likely remain very noisy and choppy, but that’s nothing new for silver.

If we break down below the 50-day EMA, the market could really start to fall from there, maybe even targeting $42. We appear to be in the middle of what looks like a topping pattern, though it’s still a little early to tell. It does look like a distribution, given that volume picked up as prices peaked, and then both volume and price declined, showing a bit of lackluster interest in this market.

The question now is whether we continue to see lackluster trading. Truthfully, it’s not until we break above the $50 level that I believe traders can feel comfortable again. Ultimately, this is a choppy, sideways type of move just waiting to happen. As mentioned, we might be in a topping pattern, though it’s too early to confirm. Silver, of course, is not gold, and it seems to have gotten a little ahead of itself with retail exuberance about two weeks ago, likely marking the top. I personally think silver has more downside potential than upside at this point, but as long as we stay above the 50-day EMA, it’s difficult to take a short position.

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