Silver Price Outlook – Silver Continues to Look Volatile

Silver Technical Analysis

The silver market has gapped to the downside during the early hours on Tuesday but has turned around to show signs of life. It looks like the $50 level is a bit of a magnet for price, and therefore a lot of eyes are on the silver market right now because, quite frankly, if we break down significantly from here, the next stop is probably $47.

The fact that we are fighting back is a reasonably good sign, but as you can see on the chart, it is obvious that volume is falling from the initial peak. That is not to say that volume is not fairly strong; it is just not as strong as it once was. Therefore, we have to be cognizant that there might be a bit of a double top being built here.

If we rally from here and break above the $51.50 level, it opens up the possibility of silver going to the $54 level. All things being equal, this is a market that continues to see a lot of buy-on-the-dip behavior so far, but we are on the precipice of something else happening. I anticipate that because we are seeing so much noise about not enough silver to cover the paper silver out there in the markets, and the howling at the moon that I see online, we are probably fairly close to the top, but we will have to wait and see.

I cannot short this market quite yet, but I do recognize that this is one you need to watch very closely because once it makes its move, especially if it is to the downside, we have a long way to go. To the upside, if we break above $54, I think we will go looking to the $60 level next, but we have some work to do to even threaten that general vicinity.

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