Silver Futures Index $SILVER (SILVER)

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Silver Drops on Tuesday
By: Christopher Lewis | October 24, 2023

• Silver fell a bit during the trading session on Tuesday, as the market is finally starting to recognize gravity.

Silver Markets Technical Analysis

Silver had initially tried to rally during the trading session on Tuesday but found enough resistance early during the session to turn things around and show negativity. The 200-Day EMA and the 50-Day EMA indicators are sitting in that general vicinity, and therefore it does suggest that there’s a lot of technical resistance in this area. Furthermore, we have seen a lot of noise here recently as well, so it all comes together for some type of pullback. That being said, the market is eventually going to have to come to grips with the idea of higher or lower interest rates, and therefore we will continue to see a lot of noise coming out of the bond market.

Furthermore, you have to keep in mind that silver has a lot of noisy behavior, under the best of circumstances. At this point, the market is very likely to continue to be noisy due to the fact that we are not sure whether or not the bond market is over, and then of course the idea that industrial demand is going to be a question as well. Remember, silver is beyond just being a precious metal, it also has major industrial uses, so it has a lot of different things going on at the same time. Furthermore, you also to pay attention to the fact that some people will be running toward precious metals in the geopolitical environment that we have at the moment, which does offer a lot of things to be concerned about.

Ultimately, bond markets also have something to say as well, as the higher the interest rates in the United States, typically the worse the silver market ends up doing. Ultimately, you need to be very cautious with your position sizing, but it certainly looks like a pullback could be coming. The market got up to this area rather quickly, so a little bit of a pullback does make a certain amount of sense, although it doesn’t necessarily mean that we are going to fall apart at this point. Quite frankly, gravity coming back into the picture makes quite a bit of sense after the monster run we had seen previously.

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