- Silver rallied rather significantly during the trading session on Tuesday, as we continue to see money flowing into precious metals overall.
- Keep in mind that silver is also an industrial metal, so part of what you are seeing here might be in reaction to trade tariffs being avoided.
- That would be a minor effect, but something that probably has some influence here.
Technical Analysis
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The technical analysis for this Silver market is pretty strong, but we are approaching a significant resistance barrier. The $32.35 level has been important resistance more than once, and my concern is that perhaps we have gotten there a little too quickly. That being said, it would not surprise me at all to see that area offer enough of a ceiling to keep the market somewhat down. However, if we can break above that level, it kicks up the next leg higher in silver trading, and silver could very well go looking to the $35 level at that point.
Short-term pullbacks should continue to see the $31 level offer support, as it was previous resistance. The so-called “market memory” could come into effect there, especially now that we have the 50 Day EMA sitting just below it and rising. Silver will continue to be volatile, but I think this would be an area that would be heavily defended. A breakdown below that level could open up significant selling down to the 200 Day EMA which is closer to the $29.50 level.
All things being equal, this is a market that I think you are looking for opportunities to buy dips, but I also recognize that we have a situation where the market is extraordinarily volatile and who really can say when the next tariff headline will hit the wires? With that being said, I’d be very cautious about my silver position size, but at this point it certainly looks as if the buyers are going to be in control, at least for the short term, despite the fact that a small pullback might occur due to the resistance barrier.
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