Silver Price Outlook – Silver Continues to Look at a Range

NEW YORK (July 30) The silver market continues to see a lot of sideways action, as we are working off the froth from the recent move. At this point, the market looks very “buy on the dip” in general.

Silver Technical Analysis

The silver market has been absolutely crushed in early trading on Wednesday, as we continue to see the US dollar strengthen. The silver market, of course, has a negative correlation to the US dollar, and I think what we’re looking at here is a market that is going to go searching for the $37.50 level. Anything below there could send the market much lower but I also recognize that you have a situation where we are trying to sort out whether or not this holds as it was previous resistance.

And of course, a certain amount of market memory can probably be found there. I like the idea of buying short term dips, but keep in mind that the FOMC meeting is late in the day and that obviously will cause a lot of volatility and chaos. So, because of this, I am a little hesitant to put a lot of money into the market right now, but small positions on dips could be possible if we get the right price action. Ultimately, the market rallying from here could see a move towards the $40 level, but I also think that the $40 level will be difficult to overcome.

Any move above $40 probably sends this market much higher, maybe in the next buy and hold type of scenario. But again, I’m not necessarily looking for a big move until after the central banks get out of the way, because it’s not just the Federal Reserve, it’s also the Bank of Canada and the Bank of Japan that come into the picture. So, the currency markets will be a big driver of a lot of different things. Ultimately, I do think we break out to the upside eventually. And once we do, I think it opens up a move to the $42.50 level rather quickly.

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