Silver Futures Index $SILVER (SILVER)

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Silver Continues to Show Resiliency
By: Christopher Lewis | November 16, 2023

• The silver market rallied a bit during the course of the trading session on Thursday, as we continue to threaten a breakout.

Silver Markets Technical Analysis

Silver markets initially pulled back just a bit during the trading session on Thursday, only to turn around and show strength again. At this point, we are trying to break out and reach the $24 level. Breaking above the $24 level opens up the possibility of a move to the $25 level above. In fact, I think it’s probably only a matter of time before we get there, but silver also has a lot of noise in the market under normal circumstances, and it won’t be any different at this point.

The thing you need to keep in mind is that the interest rate markets can move silver quite violently, and if interest rates start to climb again, that could be negative for silver. It’s also worth noting that we are sitting right in an area that has caused a significant amount of resistance previously, so there is a certain amount of trouble just above. If we were to break above there, it would be a major breakout and it would confirm that silver was going to go much higher.

Another thing you need to pay close attention to is the idea of industrial demand. If we are in fact heading into a recession, demand for silver should start to drop and that could work against the market. On the other hand, you can also make an argument for the metal being a safety trade, as precious metals can be from time to time, although I am the first to admit that I like gold more for this type of scenario. Geopolitical concerns continue to drive the narrative to a lot of markets, and if those pick up a bit, that could drive silver higher also.

Finally, pay close attention to the US dollar, because it starts to strengthen, that can work against the value of silver, unless of course people were buying silver for safety, then both could rise at the same time. Either way, it looks like we are trying to break out, and short-term pullbacks toward the 200-Day EMA could be potential buying opportunities in this type of environment. Keep your position size reasonable.

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