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Silver Forecast: Silver Loses Momentum

While there is uncertainty about whether we can fully recover, there is potential for a larger move.


  • During Wednesday’s trading session, the silver price attempted to rally and demonstrate strength following a bullish session on Tuesday.
  • However, the gains were partly given back around the $21.25 level, which had been a noisy area before.
  • While there is uncertainty about whether we can fully recover, there is potential for a larger move.

Breaking above Wednesday’s session highs could trigger a bigger move, but current momentum seems lacking. This is not surprising given the need to build a base and confidence before investing in a volatile market that has experienced recent selloffs. It’s important to note that external factors continue to impact the market, such as the lack of industrial demand and the strength of the US dollar. As a result, volatile and sudden moves are likely. Whether silver can break away from the negative correlation remains to be seen, but it’s necessary for silver to take off. Interest rates also play a role, as higher rates in the US typically work against silver, but if silver is seen as a way to preserve wealth, it could be a factor.

Regardless, the $20 level is a hard floor, and as long as it remains above that level, silver will likely find buyers on dips. A breakdown below $20 would be extremely negative for the market. In that situation, it’s likely that the market would see not only the silver market selloff, but it would probably be toxic for gold as well. Beyond that, you would probably see a huge move higher in the US dollar, which is very possible considering just how much fear there is out there.

Industrial demand is a real question at the moment, due to the fact that it’s very likely we are going to see a global slowdown, so that of course has a negative connotation to this market. If we do rally from here, the 200-Day EMA is going to be very difficult to break above, currently sitting at about $22. Anything above there would be impressive, but right now I’m just looking for a bounce more than anything else. I think the longer we spend time going sideways, the healthier and more positive it will be for silver as it could build confidence in a market that has seen a pretty ugly selloff as of late.

XAG/USD chart

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