Silver Price Outlook – Silver Continues to Show Strength

Silver Technical Analysis

The silver market gapped higher to kick off the trading session here on Friday, but then dropped pretty significantly during the early part of Friday, only to fill the gap and turn things right back around. And by doing so, market participants have shown just how strong the silver market remains. All things being equal, we had a bullish flag, which measures for a move to the $46 level.

Short-term pullbacks, I think continue to be buying opportunities and the $44 level now is offering a bit of a floor in the market. All things being equal, this is a market that I think continues to see a lot of volatility and choppiness, but that’s typical for the silver market anyway, due to the inherent nature of it being not only a precious metal, but an industrial one.

This is a very extended move, and I do think we are getting close to the idea of having to maybe pull back somewhat significantly in order to find value. But clearly the one thing you cannot do with silver is short the market. Even if you told me it was going to fall for the next two days, I would probably just wait to buy it on that dip. The US dollar, if it starts to sell off, will propel silver higher typically.

But it’s worth noting that even on days when the US dollar is strengthening, silver continues to do so. Because of this, I can’t just jump into silver based on that potential correlation. You have to pay attention to the market itself, interest rates, risk appetite, et cetera. Ultimately though, it looks like silver is just going to continue to fly to the upside.

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