Silver Price Outlook – Silver Continues to Power Higher on Tuesday

Silver Technical Analysis

The silver market initially pulled back just a touch during the early hours here on Tuesday, only to find buyers underneath willing to get involved and push the market higher again. At this point, silver looks as if it is trying to get to the crucial $40 level, an area that’s been important multiple times in the past and I think will continue to be an area that has a certain amount of psychology attached to it.

So, I think you’ve got a situation where you have to assume that there will be some type of reaction here. Whether or not silver really takes off above $40 remains to be seen, but it is worth noting that quite often what happens is we get a breakout in silver and we get a huge rush forward. Silver is a very volatile momentum driven market. So that is worth paying attention to.

It’s probably worth noting also that the US dollar has softened quite a bit during the day. And I do think you have to look at this through the prism of a market that remains correlated negatively to the US dollar. And therefore, you have to watch what is going on over there to get a true feeling for what could happen here.

The gold market is strong as well. So that correlation should hold. I suspect we have a scenario where plenty of traders out there are willing to buy on the dips, with $37.50 underneath offering massive support. The question is, can we break out of this range? It certainly looks like we’re going to try.

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