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Silver Continues to Rally

Silver had a strong session on Wednesday, as we have broken well above the $22.50 level, showing a nice rally from the $22 support region underneath.

You can see silver rallied rather significantly during the trading session on Wednesday. At this point, it looks like $22 is going to continue to offer significant support, and the way we are behaving now suggests that silver continues to go higher. The next target will be the 200-day EMA, which is near the $23.20 level and then after that, we have some structural resistance near the $23.50 level. With that being the case, we could get a little bit of a pushback here, but I think the dip will end up being a buying opportunity.

It’ll be interesting to see whether or not we can break above the $23.50 level because it does open up the possibility of another move to the $24.50 level. The $24.50 level being broken then opens up a move to the $26 level, which is the top of the overall longer-term consolidation phase that I see probably being a majority of what we do this year.

On the downside, if we were to turn around and break down below the $22 level, then we could get a move down to the $21 level, but that seems less and less likely at this point. I think we’ve got a situation here where market participants will continue to buy dips, but you also need to keep an eye on interest rates because there is a negative correlation between interest rates and silver. Furthermore, there is a negative correlation between silver and the US dollar.

Source: Fxempire