Silver Price Outlook – Silver Continue to See Pressure From Below

Silver Technical Analysis

Silver has been back and forth in the early hours on Monday as we try to figure out where we’re going next. Quite frankly, I do think silver is going to play a little bit of catch up with the gold market, but it’s also worth noting that gold is overbought as well. A short-term pullback would make a certain amount of sense, with the 200 day EMA sitting below, near the $31 level. I think that sets up as a nice opportunity to get moving for those who may have missed the bounce that we’ve seen over the last several sessions.

The US dollar is a little oversold at this point, so that could be the main culprit for silver pulling back. But also keep in mind that the silver market is not just a precious metals market, but it’s also an industrial one. This will be affected by the idea, or at least the perception, that perhaps global growth is slowing down, and if that is, in fact, the case, then you’re going to have an issue where while silver may climb, it may not climb as much as gold.

All things being equal, though, it does look like we are in the midst of trying to recover, and I would postulate that a lot of the selling a couple of weeks ago in both silver and gold had a lot to do with the idea that it was forced liquidations. What I mean by that is a lot of hedge funds were highly levered to various markets and when everything started falling apart, they had to sell the markets that they had the most gains in, in order to cover margin calls and other assets.

So silver was a victim of this. Well, certainly gold was. So one would think that one movement leads to the other. I am bullish on silver, but I do think eventually, we try to get back to the $35 level. I just don’t think it will be as aggressive as some people wish, and probably not as aggressive as it had been on the way down.

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