Silver Price Outlook – Silver Gaps to Higher Levels

Silver Technical Analysis

Silver has gapped higher to kick off the trading session on Thursday as we are now racing toward the $40 level. Silver, of course, is an extraordinarily volatile asset, so it’s not a huge surprise, and $40 has been a target for some time. The question now, of course, is whether or not we can break above $40 and continue to go higher. Short-term pullbacks, I think, would be expected, but the fact that we gapped above the $39 level is a good sign, and suggests that we have momentum shifting to the upside again.

There is significant support, not only at the $39 level, but also at the $37.50 level, where the 50-day EMA resides and where we had seen both support and resistance previously. I have thought for a while that eventually we would break above that $40 level, and if and when we do, that should kick the next leg off to the upside. One would suspect that you’re looking at about a $2.50 gain, possibly $3. So, the target on that move would be $42.50, possibly $43.

Silver does tend to grind sideways for a while and then get sudden and impulsive moves. And this might be one of those sudden and impulsive moves. If the US dollar continues to struggle, that also helps silver. So, keep that in mind, because if you’re trading silver, you need to keep an eye on the US dollar index. All things being equal, this is still a very bullish market.

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