Silver Price Outlook – Silver Continues to See Support Underneath

Silver Technical Analysis

The silver market initially pulled back just a touch during the early hours on Tuesday only to show signs of strength yet again. All things being equal, this is a market that I do believe continues to respect the $37.50 level as massive support, especially now that the 50-day EMA is racing toward that level. It’s worth noting that the $37.50 level had previously been significant resistance before it became support, so there’s a lot of order flow in this area.

All things being equal, I also recognize that this is a market that is still very bound with the $39 level above being significant resistance. Anything above there opens up the possibility of a move to the $40 level, although I don’t necessarily think it happens right away. I expect a lot of choppy back and forth trading, but I prefer to buy the dips more than anything else, and I certainly don’t want to short silver.

In fact, it’s really not until we break down below the $35 level that I would even start to consider that the trend may be in serious trouble. Remember, this is a time of year where volume drops off, so it does make a certain amount of sense that we just meander sideways for a while as traders do everything they can to at least attempt to figure out what to do next.

But also, I think we’re waiting on a lot of things such as the results of the Jackson Hole Symposium, whether or not the Federal Reserve is going to become aggressive in cutting its rates, and of course, indicators that could tell us about industrial demand for silver. So, at this point, I’m bullish, but somewhat muted in my expectations.

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