Silver Price Outlook – Silver Continues to See Volatility

Silver Technical Analysis

Silver has found itself dropping a bit in the early market trading on Monday, which does make a certain amount of sense as we are seeing the U.S. dollar strengthen a bit. Remember, most times—not always but most times—the silver market runs counter to what the U.S. dollar is doing as they have a pretty strong negative correlation.

Ultimately, though, silver has been very bullish for a while, and until I see something that proves otherwise, I have to assume that these dips end up being buying opportunities. From a technical analysis standpoint, you can see plainly that the $37.50 level is an area that has been important multiple times, as it has been resistance followed by support. The 50-day EMA now finds itself right around that level as well, so I think it does make quite a bit of sense that we would see short-term buyers offering a little bit of support if we do get anywhere near that level.

Long-term buyers most certainly will be interested as well, but quite frankly, when you’ve had an uptrend like we’ve had since the beginning of April, most longer-term traders are already invested here. To the upside, the $39 level is a short-term barrier, but I think the real ceiling in the market at the moment is the $40 level. If we were to break above there, that would be extraordinarily bullish for silver and could send it screaming to much higher levels.

That being said, it is a fairly quiet time of year typically, and of course, nobody’s really sure where the global economy is heading at the moment. And it is worth noting that silver is an industrial metal. So, while I like buying dips, I also recognize that it could be quite noisy.

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