Silver Price Outlook – Silver Rallies Early on Tuesday

Silver Technical Analysis

The silver market has rallied quite nicely during the trading session on Tuesday as we are trying to recover some of the massive losses that we had endured during the Monday session. All things being equal, I think this is a scenario where traders will look at the $70 level in the futures market as a major floor. And I think recently I have said a few times that really what we need, if you’re going to stay elevated like this, is sideways action in order to have the market work off some of the excess and get used to these higher prices.

Sideways Action Needed

Traders have to be able to look at this through the prism of whether or not the price is sustainable. Clearly, the momentum isn’t. But if we sit here for a while, market participants begin to accept the price. And I think that’s what we are looking at. Ultimately, this is a market that I think will look at the market from a buy on the dip perspective. And if we were to break down below the $70 level, I don’t think that kills the trend. I think what that does is have you looking for a drop to $65, then $60, etc.

I think $60 probably is the floor at the moment. But even if the trend were to change right now, the floor in silver has definitely risen. We’re not going back to $12 an ounce anytime soon. I think we’re just trying to find the true value of silver, which has been suppressed for years, and now nobody really knows what to do. The one thing I know I’m not going to do, though, is short this market.

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