Silver Price Outlook – Silver Pauses Early on Monday

Silver Technical Analysis

The silver market has been very choppy and quiet during the early session here on Monday, but that makes a certain amount of sense because we had such an explosive move to the upside on Friday, we have recently broken out of a bullish flag, which measures for a pretty significant move to somewhere in the neighborhood of around $46. And really, there’s nothing on this chart that suggests we can’t do that. Short-term pullbacks are possible, especially with the Federal Reserve interest rate decision coming out on Wednesday.

Those pullbacks will more likely than not be so short-lived because there’s obviously a lot of momentum in this market. But pay attention to how the Federal Reserve behaves because it’s not so much about whether or not the Federal Reserve will cut rates. I think pretty much everybody out there is expecting a 25 basis point interest rate cut.

But the reality is that we are looking at whether or not the Federal Reserve is going to become aggressively loose with its monetary policy. Are they concerned? Are they worried about the economy? That could change a lot of things. But really, at this point in time, I think you’ve got a situation where you’re looking for a bit of buy on the dip type of trading. And I do think the top of the flag, basically right around the $42 level, is support.

After that, you have $41 offer and support. And then after that, the $40 level, I think, becomes your absolute floor. It was a major ceiling previously. All things being equal, this is a market that I have no interest in shorting, and I am looking to get long on dips.

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