Silver Futures Index $SILVER (SILVER)

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Silver Continues to Look at Support Underneath
By: Christopher Lewis | September 28, 2023

• The silver market has continued to stabilize near the $22.50 level, as we see the overall consolidation area continue to hold.

Silver Markets Technical Analysis

Silver has hung onto the support level of the bottom of the longer-term consolidation area, as we continue to test the $22.50 region. Keep in mind that higher rates have been a major factor in the silver market as of late, and rates seemingly do not want to stop climbing. That being said, silver does have a little bit of protection in the form of industrial use, unless of course people start to focus on the idea that the economy is going to slow down. Regardless, there’s also the part that comes into play when it suggests that silver could protect a little bit of wealth.

That being said, higher interest rates are the thing that traders are focusing on at the moment, and therefore it certainly has a negative influence on silver itself. If we can turn around and rally from here, the 200 day EMA above could be a short-term target, and if we can break above there, then we can go much higher. If we can break above the 200-Day EMA, then it could go looking toward the top of the range, which is closer to the $25.50 level.

Expect a lot of volatility, but ultimately, I do think that the range has held so far, and that’s something worth paying attention to. However, if we were to turn around and break down below the support level underneath, it opens up a move to the $22 level, and then after that we have a move on to the $20 level. Ultimately, this is a situation where you need to be cautious with your position sizing, due to the fact that silver is naturally volatile anyway. However, at this point there are so many different crosscurrents that it’s going to be difficult to hang on to anything with a huge position on.

As for a strategy, I’m looking to enter the market very slowly, and then add to it over the next several sessions once I do get involved. All things being equal, this is a market that is about to make a bigger move, and once it does I plan on being involved, but I won’t jump in with a huge position right away.

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