Silver Price Struggles at $70 as Fed Catalyst Looms

Silver Technical Analysis

The silver market initially rallied a bit during the trading session here on Thursday but gave back gains as we got to the $70 level yet again. That’s been the story all week, where $70 has been like a brick wall.

Now traders are going to have to ask questions as to whether or not we are seeing a serious change in attitude or maybe just a little hesitation. And I think the idea of hesitation makes a certain amount of sense, considering that we have the speech by Kevin Warsh from the Federal Reserve on Friday that will be a major indication of where the Federal Reserve may be going with its interest rate policy, which is a major influence on silver.

Interest Rates Can Matter Here

The silver market, of course, is one that typically is sensitive to interest rates and the value of the US dollar, as it’s denominated in those dollars. And he could say something to rattle the markets. If he sounds more hawkish than people anticipated, that really could play havoc with not only silver, but just the markets in general. If he sounds more dovish, then historical correlation suggests that silver might be able to finally break the $70 level.

Ultimately, I do think silver is bullish long-term, but long-term might be something that we have to wait 6 months for, so I’m a little hesitant to get involved here. A pullback towards the 200-day EMA could be interesting if we get a bounce, but beyond that, I think this is a situation where a lot of traders are probably going to be waiting to see how the Friday action plays out.

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