Silver Price Outlook – Silver Continues to See Upward Pressure

Silver Technical Analysis

Silver broke higher again during the trading session on Friday, as we have made a fresh new high yet again. And again, following the price is really all you can do. I will be the first to admit I don’t like this market. In fact, the market is one that is very difficult to get your hands on. But as things stand right now, it’s obvious that you can’t get short.

That being said, even with these higher highs, the volume continues to drop. And with that being said, I think you have a situation where if we drop, the market should see plenty of support near the $51.50 level. If the market were to break down below there, then you could have the $50 level offer in support. It takes a long time, I think, to get down to an area where we get a sell signal. And as things look right now, we would have to break down below the $47 level.

Low-Volume Rally Technical Analysis

Ultimately, this is a market that I think tries to go looking to the $55 level, possibly even during the Friday session. But where do we go from here? That’s the real question. And right now, the answer looks higher, but there’s no real clarity here because of that lack of volume. I don’t like the mix of higher prices, lower volume, but we’ve been going through this for a couple of months now. And it’s actually one of the more bizarre moves I’ve ever seen in the financial markets in 20 years.

So, it is a very murky situation. On the other hand, you have gold rising, and that should help silver, but at this point in time, I’m still much more comfortable buying gold because it has an underlying bid. This has a whole lot to do with spot silver versus futures silver prices and storage in London at the London Metal Exchange. This is the attempt at a short squeeze, and that’s fine. But these things typically deflate pretty quickly as well. Be careful. If you have to be involved, you have to be on the upside, obviously. But if it turns around on you, you’ve got to get out quickly because this thing can drop 7% in a day and quite often does in horrible situations. So, we’ll just have to see. This is a scenario where we have a lot of trouble.

And I think you simply have to protect your account, keep that position size reasonable. If you believe in silver in the long term, because I am starting to hear $150 an ounce being possible, that’s fine, but don’t bet the farm on this. This could get you into trouble.

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