Silver Price Outlook – Silver Suddenly Looks Vulnerable

Silver Technical Analysis

The silver market gapped lower to kick off the trading session on Friday, only to turn around and fill that gap and then drop again. With that being the case, market participants continue to see a lot of noisy behavior, and the possibility of a double top is a very real thing here. It is worth noting that the volume had dropped quite drastically on the way back up, and that was something I was warning about. Now this suddenly looks very precarious if we continue to the downside, and I would say if we break down below $50, that is not a good look.

Silver is a very dangerous market to trade in most of the time anyway, and quite frankly, the demand for silver is not the same situation as we have in gold. So, silver falling does not really surprise me. What has been somewhat surprising is that all of a sudden, there was a huge demand for it. That being said, there are questions about whether EV or green technology will push up demand. It does not really seem to matter, though. Silver has been imbalanced for a long time. There has always been a shortage, and silver would trade at $15 an ounce, so I do not know that anything has truly, fundamentally changed.

This has been a pretty excellent short squeeze to the upside. But the question now is, will $50 hold? If it does not, that is not a good look. That does not mean that we plunge straight down, but a double top at $54 is pretty ominous. We will have to wait and see.

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