Silver Price Outlook – Silver Continues to Look Dangerous

Silver Technical Analysis

Silver has been slightly negative in early trading here on Friday, which, quite frankly, makes sense. This is a market that’s gone straight up in the air for so long that it’s difficult to get overly excited about chasing it, although I’m sure plenty of you are doing exactly that. It’s worth noting also that the spot silver market is about $2 higher than the futures market. And that, of course, is a sign of something called backwardation.

Backwardation means that futures prices are lower in the future than current pricing. It can be thought of as a bearish sign, but we’ll just have to wait and see. I do think at this point, this is a market that has gotten so extended that, quite frankly, a pullback is not only likely, it’s probably necessary. The $50 level would be an area I think a lot of people will be paying attention to, followed by the $48 level.

The 50-day EMA is sitting right around the $45 level, which I think will end up being more or less your floor in the market. I don’t have any interest in shorting this market, but I do recognize it’s a little overdone. Ultimately, this is a market that has caught a lot of attention out there, and you’re starting to see people in some countries line up outside stores to buy gold and silver, which, between that and the conversations I saw last weekend, pretty much everybody’s talking about this, and we all know what that means. That’s a sure sign that we’re getting ready for a vicious correction. I don’t know when it happens, but I look at it as a potential buying opportunity.

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