Silver Price Outlook – Silver Continues to See Barrier Above

Silver Technical Analysis

Silver pulled back just a bit during the trading session on Friday as the market has shown itself to be a little bit hesitant to try to break above the $40 level. The $40 level, of course, is a large, round, psychologically significant figure in an area that I think if we can break above there, then it’s likely that we will go much higher. The $37.50 level underneath is support from what I can see. And ultimately, this is a market that is very noisy. Therefore, it’s not surprising to see that we have pulled back just a bit. The silver market, of course, is very sensitive to what’s going on with the US dollar as it is negatively correlated to it.

So, with the US dollar perking up just a touch, it makes a certain amount of sense that silver is not necessarily struggling, just that it’s giving back some of its initial momentum. And of course, the fact that we were near a major resistance barrier only adds fuel to that fire. I do think that ultimately, we have a scenario where traders are going to look at this and eventually look at silver as being cheap. And I don’t know if it’ll be closer to the $37.50 level or if it will be somewhere in the middle of this range because that’s quite common as well.

All things being equal, I do like the idea of buying silver on dips. I certainly don’t want to short this market. It’s been far too strong. With that, if we did break down below $37.50, then you have to ask questions about the 50 day EMA, which sits just below there. In general, this is a market that I think once it breaks the $40 level should go much higher, perhaps to the $42.50 level based on the measured move. But regardless, like I stated before, there’s no chance of me shorting silver with this type of just vicious uptrend.

When you look at it, the silver market has actually been in an uptrend for about three years. It was sideways a couple of times, and it’s very possible that we go sideways for the short term. But over the longer term, it goes from the lower left to the upper right, and there’s really no way to dispute that. So with that being the case, I think you have to be bullish, and you just cannot short what has worked so well, which of course has been buying the dip.

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