Silver Rallies Again

(December 20, 2023 - Christopher Lewis)

Silver broke a little higher during the trading session on Wednesday, as we continue to hang around the $24 level. That being said, the market does have a lot of resistance above that it will have to deal with.

Silver Markets Technical Analysis

Silver rallied a bit during the session on Wednesday, as we continue to see a lot of upward momentum. All things being equal, this is a market that every time we go back, there should be plenty of buyers willing to step in and take advantage of “sheet-metal.” The interest rate situation in the United States will have a major influence on where we go next, therefore we need to pay close attention to the idea of whether or not they are rising or falling. If they continue to fall, then we will more likely than not see silver take off, perhaps toward the $26 level again.

Ultimately, the $24 level is an area that a lot of people will look at as a bit of a magnet for price, and there is a certain amount of support underneath it, especially down to the 50-Day EMA, which is right around the $23.50 level. In general, silver tends to be negatively correlated to not only interest rates in the United States, but also the US dollar itself. So, let’s pay attention to that to determine where we go next. Overall, though, the momentum is certainly to the upside and it’s difficult to get bearish on this market anytime soon. In fact, I suspect that most people work in a look at this through the prism of buying dips anytime they can.

All things being equal, I believe that silver will have a good 2024, but as we head into the holiday season it could be a situation where we run out of liquidity. If that’s going to be the case, then it would not be surprising at all to see the market go sideways in the short term, even though we opened up with a bit of positivity on Wednesday. The closer we get to the end of the week, the less likely we are to see the market show a lot of volume, which of course can make it a strange market to begin with. Keep in mind that Monday is closed for Christmas, so a lot of traders will try to get their business done rather quickly between now and then.