Silver Futures Index $SILVER (SILVER)

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Silver Bounces After Initial Drop
By: Christopher Lewis | November 8, 2023

• Silver fell to kick off the trading session on Wednesday, only to turn around and bounce a bit by the time the Americans got on board. In doing so, it shows that the bottom of the potential bullish flag is trying to hold.

Silver Markets Technical Analysis

Silver fell to kick off the trading session on Wednesday, only to turn around and show signs of life again. By doing so, it shows that the bullish flag is trying to hold its shape, which suggests that we will continue to go to the upside. The 50-Day EMA above could be a bit of a target in the short term, as well as the top of the overall flag. I do think at this point in time we are likely to see a lot of traders jumping into the market, but if we get some type of fundamental reason for silver to take onto the upside, then it’s possible that we could see momentum picked back up. Keep in mind that the silver market is moved by quite a few external factors.

The first thing that you need to pay the most attention to is interest rates. If interest rates rally, a lot of times they work against silver. However, there are a lot of geopolitical concerns out there, and that has people looking for safety trades, and “hard assets” such as gold and silver. Finally, you also have to pay close attention to the fact that silver is an industrial metal, and therefore the global economy has a huge influence on silver as seen through the prism of demand. Because of this, silver tends to be very noisy and I don’t think that changes anytime soon with the massive amount of indecision that we see out there.

If we were to turn around and breakdown below the lows of the day and essentially the bottom of the bullish flag, then the market could test the $22 level, possibly even down to the $21 level. In that environment, I suspect that the US dollar will have spiked against almost everything, and silver would just be a victim of the greenback taking off to the upside in general. Because of this, I think you’ve got a situation where the market is going to continue to see a lot of choppy behavior and therefore you should prepare accordingly.

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