Silver Targets Potential Drop to $50 If Bears Break $57

Silver Technical Analysis

The $60 level is an area that I think a lot of people will be watching closely. It is a large area on the charts in the past; a lot of market memory is there. If we were to break down from here, the $57 level I think, opens up the possibility of a drop down to the $50 level.

Macro Headwinds and Key Technical Levels

Ultimately, if we do rally from here, I think you have to look at the 200-day EMA as a major problem. The US dollar being strong and, of course, interest rates being strong in America, give us a little bit of trouble in the silver market.

That being said, in the longer term, I do like silver in the sense that there is a major lack of supply for the demand that is still out there. As long as interest rates and inflation concerns are still out there, people jumping in and taking advantage of those higher yields in the bond market, a non-yielding asset like silver is going to struggle. This is especially true with the US dollar strengthening, but when you look at silver against other currencies, it is doing better, which makes a certain amount of sense.

So ultimately, I think we just bounce around here, pay attention to $57. If we break down through there, then it is likely that we really start to sell off. Rallies I do not trust, but if we were to break above the 200-day EMA, then obviously something will have changed, as we can reevaluate the market itself.

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