The silver market fell again on Tuesday, as silver seemingly cannot get out of its own way at this point.
Silver
The silver market fell almost immediately at the open on Tuesday and just continued to collapse. All things being equal, I think this is a market that continues to look at the $60 level as significant support, and therefore, it makes a certain amount of sense that we find ourselves testing it again. If we were to break down below the $60 level, that would obviously be a very negative turn of events.
If we break down below there and perhaps even the $59 level, then it opens up a trapdoor to reach the $50 level. Short-term rallies would be an opportunity to start selling at the first signs of exhaustion. Keep in mind that the 200-day EMA should offer a bit of resistance right along with the $70 level.
Analyzing Potential Support and Regime Change
Ultimately, this is a market that I think is trying to find some type of base, and the basing pattern could open up the possibility of perhaps a large bounce, but we need some type of external factor to get the silver market really going.
Interest rates going lower typically will help silver, but we have seen that kind of breakdown over the last several sessions, so I think we’re in the midst of some type of regime change. If inflation is starting to drift lower, and we are kind of seeing that, silver could find itself at $50, where it will attract a lot of attention because 50 historically has been a very big level.
Watch that $60 level. If we bounce from there, it’s probably a short-term buying opportunity, very short-term. If we break down through it, we probably have another $10 to lose.
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Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions
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