Silver Futures Index $SILVER (SILVER)

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Silver Gaps Higher to Kick Off the Week
By: Christopher Lewis | October 30, 2023

• Silver gapped to the upside during the trading session on Monday, breaking above the 200-Day EMA.

Silver Markets Technical Analysis

Silver has gapped higher to kick off the trading session on Monday, showing signs of bullish pressure yet again. At this point, it will be interesting to see if we can reach the recent swing high at the $24 level, but it certainly looks like we are going to try to do so. If we can break above the $24 level, it’s likely that silver will go much, much higher.

With that in mind, I would be a bit hesitant to get overly aggressive in this market, because it is moving solely on a motion at the moment. A short-term pullback does make a certain amount of sense as the futures markets tend to fill gaps given enough time, which also would coincide with testing the 50-Day EMA.

Ultimately, it does look like we are trying to form some type of bullish flag, but we will wait and see whether or not it actually breaks out. Yes, it’s almost impossible to short this market, but if we were to break down below the bottom of the Thursday candlestick, then smashing through that hammer would open up quite a bit of selling pressure, perhaps sending silver down to the $22 level.

Keep in mind that the silver market is likely to see a lot of volatility as traders start to look at it through a potential safety trade as the noise in the Middle East is certainly going to have traders looking for safety. However, you also need to pay attention to the fact that interest rates are very high at the moment, so that does somewhat tamper down the enthusiasm for precious metals. Another thing to think about is that silver is an industrial metal as well as a precious one, so it does pay close attention to the overall industrial demand.

I suspect that silver is going to continue to be very noisy, and you do need to be very cautious with your position sizing. At this point, it looks like the market is more likely to go higher than it is to go lower, but caution is going to be necessary when trading the silver market at this point.

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