Silver Price Outlook – Silver Falls on Friday

Silver Technical Analysis

The silver market has plunged during trading on Friday in the early hours, but it looks like the $35.50 region is in fact going to continue to offer support, as it was previous resistance, so you would anticipate a little bit of market memory here. The question of course is, can we hold this area? So far, it looks like we can. We bounced about 50 cents from there, so that is a good sign. And of course, you have to keep in mind also that silver is highly sensitive to the US dollar, which is all over the place during the day.

Ultimately, I do think we just grind sideways and try to work off some of the excess froth, which after the big move higher does make a lot of sense. And you should keep in mind that silver, although a precious metal, is also an industrial one. So, I think part of what’s been going on is people have been buying silver to protect their portfolio, but you also have to ask what the demand’s going to be. Generally speaking, demand for silver is fairly high, but that was true when silver was $15 an ounce, so there you go.

The size of the candlestick is rather important, and the longer the wick by the end of the day, the happier I’ll be to the upside, but I certainly don’t see any reason to be shorting silver quite yet. At the very least, you’d have to break down below the $34 level to even have a serious conversation about that. If we can break above $37, I believe, silver goes looking to the $40 level.

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