Silver Futures Index $SILVER (SILVER)

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Silver Continues to Look to Upside Cautiously
By: Christopher Lewis | September 19, 2023

• The silver markets continue to rally, as the impending FOMC meeting looms large with silver traders.

Silver Markets Technical Analysis

Silver experienced a modest rally during Tuesday’s trading session, signaling its intent to break through the stubborn $23.50 resistance level, a persistent obstacle in recent times. If this resistance is successfully breached, it could open the door to a potential upward surge. The market has been striving to rebound from the lower end of its long-term range, and current momentum seems to favor an upward trajectory. It’s important to note that the 50-Day Exponential Moving Average hovers just above, likely to attract the attention of market participants.

In analyzing the silver market, the $22.50 level emerges as a crucial support zone, while the $25.50 level above represents the upper boundary of the range. Considering all these factors, it appears that silver is gearing up for an upward move, albeit amid expected volatility along the way. This volatility could become more pronounced, given the imminent FOMC meeting and the accompanying press conference scheduled for Wednesday. The market’s behavior may also be influenced by the performance of the US dollar, although the correlation between the two is not always perfect.

Interest rates also exert their influence on the silver market, but it’s essential to acknowledge that silver has been consolidating within a reasonably well-defined range since May. Therefore, it’s prudent to expect this range to continue influencing the market, at least in the intermediate term. At this juncture, the preference leans toward adopting a buying strategy rather than selling. However, it’s crucial to recognize that this market is unlikely to experience a sudden take-off. Instead, it’s more likely to involve a gradual ascent, characterized by periods of grinding movement. Given this expectation, closely monitoring position sizes is paramount, as volatility is expected to be a recurring challenge.

Nonetheless, it’s worth noting that silver currently finds itself closer to the bottom end of its range than the top. This suggests that there is a certain level of demand in the market at present, reinforcing the notion that buying opportunities may be more favorable than selling ones. As the silver market navigates its dynamics, a prudent and patient approach remains key to capitalizing on potential opportunities. Regardless, it’s important to exercise caution and avoid overexposure on one side or the other, despite the fact that we are currently closer to the bottom of the range.

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