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Silver Price Forecast – Silver Continues to Drift Lower

The silver markets got a horrific beating on Monday, and now it looks like we are going to continue to drift a bit lower on Tuesday. That being said, we now have to start asking whether the trend has changed?

Silver Markets Technical Analysis

Unfortunately for retail traders, many of them take a look at the chart and try to predict price based solely upon a candlestick. That being said, a lot of people got hurt on Monday, as precious metals took off almost immediately.

We have seen the market turn around and break rather significantly to the downside, and if you watched my analysis during the day yesterday, you recognize that I said we probably have further to go. After all, a nasty candlestick like the one we formed on Monday very rarely happens in a vacuum.

I suspect that we are probably going to drift toward the $24 level underneath, which of course is a large, round, psychologically significant figure, and an area where we have seen some resistance previously. If we do fault in that area and bounce, I’m comfortable buying silver at that point.

However, silver traders are focusing on the bond market, so unless you have an eye on the 10 year yield in the United States, you are probably going to be “flying blind” in this market. Because of this, I think there will be plenty of traders down there willing to try to find “cheap silver”, but it might be closer to that $24 level, possibly even the 50-Day EMA after that.

If we were to turn around and break above the $25 level without doing so, then it would obviously be a very bullish sign, but we had been so overbought for the last couple of days and of course we have seen this massive selloff after that, suggesting that we are in desperate need of some type of value to come back into the market.

Because of this, you have to be very cautious with your position sizing and recognize that the type of volatility we could be seen in the short time is something worth paying close attention to. With that being the case, you need to be very cautious with the idea of buying silver, but I think if you are patient enough, you probably have an opportunity coming.

Source: FXempire