Silver Futures Index $SILVER (SILVER)

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Silver Continues to Show Volatility
By: Christopher Lewis | October 23, 2023

• Silver fell significantly during the trading session on Monday but continues to find buyers on dips. The question now is whether or not we are going to make a big move higher, or if we are going to fall back down?

Silver Markets Technical Analysis

Silver fell quite a bit during the trading session on Monday, as we broke below the 50-Day EMA, only to turn around and show signs of life. Ultimately, I think this is a market that will continue to see a lot of noise, which is typical for silver anyway, due to the fact that it is moved around by so many different external factors. Silver of course is sensitive to the US dollar, as the contract is priced in that currency.

It’s also very sensitive to interest rates because if they start to rise again in the United States, that can work against silver. However, it’s also worth noting that the market is sometimes used as a safety trade, and the recent geopolitical turmoil that we have seen in the Middle East has helped precious metals in general. Furthermore, silver is an industrial metal, so that causes a lot of headaches for traders as well.

It’s worth noting that we bounced from the 50-Day EMA, which of course is a major technical indicator, and a lot of people will have been paying close attention to it. The 200-Day EMA is in the same neighborhood as well, although it’s probably worth noting that both of these indicators are relatively flat and have been sliced through a couple of times over the last 2 weeks. Because of this, it shows that the market has no idea what to do with itself and it’s probably worth noting that we had shot straight up in the air and it’s only a matter of time before we see exhaustion come into the market.

If we can break above the $24 level, then the futures market will almost certainly drag silver higher, perhaps opening up a move all the way to the $25.50 level. That would obviously involve a bit of a panic trade, and right now I think we are more likely than not to see a lot of noise over the next few days, so pay close attention to these levels for guidance as to where the market may go.

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