Silver Markets Technical Analysis
Silver has rallied just a bit during the early hours on Tuesday as it looks like we are hanging around below the 200 day EMA and trying to form a little bit of a floor in the market. This looks like a bounce in a bearish move, so I’m not overly excited, but if we could recapture the $31 level, it could, in fact, lead to more silver buying, a little bit of FOMO, if you will. At lower levels, near the $28.75 level, I see a lot of noise out there that suggests that we will continue to perhaps look for a bottom and keep in mind that a lot of what’s been going on in the precious metal sector has been forced selling from those who have to cover the margin in other parts of their portfolio. That being said, this is a market that has been pretty oversold for a couple of days now.
So, I do think a short-term bounce makes sense. If we break down below the $28.50 level, then we could see a significant amount of downward pressure. And that probably coincides with some type of meltdown in other assets. In general, the silver market is not as much of a precious metal concept as gold is. It’s also an industrial market. So, you have to keep in mind that the global slowdown, of course, will keep demand lower. While I do think silver tries to bounce eventually, I don’t know if it will have as much traction as gold.