Silver Price Outlook – Silver Drops on Tuesday

Silver Technical Analysis

The silver market has gapped lower to kick off the trading session here on Tuesday, as we continue to see a lot of noisy trading overall. Silver was a bit overdone, and therefore, I think it makes a certain amount of sense that traders will continue to look at this as a market that is more or less buy on the dip. When I look at the $37.50 level, I think that is an area that should be important, as it previously had been resistance, and it should now end up being support. With this, I do like the idea of trying to take a buy on the dip approach, perhaps getting all the way to the $40 level before it’s said and done in silver.

After all, silver does like large round numbers and of course futures markets are highly influenced by options traders. So, it does make a certain amount of sense that they will at least try to get there. With this, I like silver. I recognize this pullback as a little bit of an opportunity, but you do need to be very cautious with silver because it is a volatile and dangerous market at times. The market breaking down below the $37.50 level would be a very negative turn of events and I think would have a lot of people perhaps thinking that we were going back to the $35 level. Ultimately, I do think that we not only touch $40, but I think we break through it.

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