Silver Price Outlook – Silver Continues to See Buyers

Silver Technical Analysis

Ultimately, I think we’ve got a situation where we could find ourselves just hanging around the $48 level. The $48 level, of course, is a large, round, psychologically significant figure, although not as big as 50, which we did test. That being said, we had a massive amount of volume come into the market. And I think we’re going to have to learn to deal with the $50 level in the futures market as a bit of a barrier. It’ll be interesting to see how this plays out.

We are trying to fight back, but that type of volume jumping in does suggest that there’s something going on. I think at this point, if you are involved in silver, really what you want to see is either a short term pullback or a bit of sideways dancing before the next leg higher. The silver market has historically had a major problem with the $50 level multiple times over the decades. And I think that’s part of what’s going on here. There’s probably people that have been in it for quite a while and said, get out.

But there’s also a question as to whether or not there can truly be a short squeeze. We’ve seen this a couple of times since I think 1979 or maybe 1980. And every time it ends in tears. So we’ll have to wait and see how that plays out. But right now, I’m not willing to short gold or silver, and especially not silver, considering how it has outperformed gold, at least recently. But I think you’ve got a situation where you could pull back to the $45 level quite rapidly, and I don’t know if that would change much.

So be prepared for volatility. Do not get into a huge position. I’m already getting emails about people who got into a huge position during the Thursday session and are still underwater, worried about their accounts already. Do not do that. This is a market that can be extraordinarily dangerous, and we may see why here in the next couple of days.

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