Silver Price Forecast – Silver Continues to See Supportive Action

Silver Markets Technical Analysis

The silver market has rallied rather significantly during the early hours on Thursday, and at this point in time, the market is likely to continue to see a lot of volatility in reaction to that 50 basis point interest rate cut on Wednesday from the Federal Reserve. I think silver remains bullish, but I also think it’s not quite the grand slam everybody thinks it is.

The Federal Reserve cutting interest rates by 50 basis points could suggest that there’s a little bit of panic at the Fed, and that’s not a good thing. Silver has had a strong run over the last couple of months, and therefore people may have to be forced to short the market or at least take profit to raise liquidity. Remember, most funds are trading multiple levered instruments and if we suddenly see a panic sell off, that means that they will be selling the strong ones as well in order to cover losses elsewhere.

All things being equal, I do think that pullbacks are buying opportunities, and I would not be surprised at all to see silver break out above the swing high from May or late April, but I don’t think it’s going to be an easy road to get there. Yes, it looks very strong in the short term, but we will have to wait and see whether or not people start to question the motives of the Federal Reserve because quite frankly, there’s only been 250 basis point rate cuts in the last 25 years, and both of them proceeded pretty significant and nasty recessions.

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