Silver Price Outlook – Silver Continues to See Rate Sensitivity

Silver Technical Analysis

The silver market has shown itself to be very positive in the early hours here on Wednesday as traders are looking at this as a market that is reacting to the peace dividend coming out of the Middle East. What I mean by that is that as the Americans and the Iranians look like they’re getting a little closer to peace, rates get crushed. Silver rallies. Rates are actually toxic for silver because it’s a non-yielding asset. In other words, it’s easier to own paper than metal.

As far as the price action so far, we have broken above the 50-day EMA, and it looks like the market is trying to get to the $80 level. The $80 level is an area where I think you’ll see a lot of resistance, but I also think that if you can break above there, this thing could really take off. This would take further good news though, so we will have to wait and see.

Market Resistance and Pullback Potential

It wouldn’t surprise me to see a little bit of a pullback here though. I think you buy the dips, but I think the pullback would make sense considering we’ve heard these stories before and it would only take 1 tweet to set things on fire again.

I believe that we’re still testing $70 as support, $80 as resistance, and until we break out of this area, it’s short-term buy the dip, maybe sell the rip. We’ll just have to see. Position sizing continues to be a major factor in your profitability, as silver is volatile under normal conditions, and these aren’t normal conditions, they are worse.

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