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Silver Forecast: Shows Signs of Consolidation

Silver experienced a slight pullback during Monday’s trading session, hovering around the $25 level. This psychologically significant figure has played a key role in the market’s recent movements. After a rapid ascent, a mild correction is to be expected. If silver is to continue its upward trajectory, a pullback may be necessary to attract more buyers. Last week, as weaker-than-anticipated inflation numbers emerged in the United States, silver saw a surge as traders sought wealth preservation amidst decreasing bond yields.

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Despite the recent pullback, the technical analysis suggests that a potential entry point lies around the $24.50 level, which served as recent resistance. Should the market break below this level, the 50-Day Exponential Moving Average becomes a critical support level to monitor.

  • A breakout could propel silver towards the $26 level and potentially even the recent highs near $26.45 given sufficient time.
  • The performance of the US dollar should be closely observed, as the negative correlation between the two markets appears to be regaining prominence.
  • The US Dollar Index serves as a valuable secondary indicator for silver, warranting careful attention.

Only if silver breaks below the 200-Day EMA, which is currently near the $23.25 level, would shorting the market become a consideration. However, such a scenario seems unlikely in the near future. Consequently, the prevailing strategy in this market is to “buy on the dips.” While a retest of the recent highs is anticipated, a short-term pullback might occur before reaching that point.

Silver has encountered a slight pullback, consolidating near the $25 level after a notable surge. The market is poised for a potential entry point around $24.50, which previously acted as resistance. Traders should closely monitor the 50-Day EMA as a critical support level. If a breakout occurs, silver could rally towards the $26 level and beyond. The US dollar’s performance remains a significant factor, given its negative correlation with silver. Only a break below the 200-Day EMA would signal a potential shorting opportunity, which does not appear likely in the near term. Overall, the market outlook favors a “buy on the dips” strategy. While the retesting of recent highs is expected, a short-term pullback could precede that move.

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