Silver Forecast: Continues to See Overhead Selling Pressure

• The silver market saw some retracement during the Wednesday trading session, though it has been bouncing back and forth in a range, with both buyers and sellers entering the market.
• Currently, the market is at a crucial area, which has been a major resistance level in the past, and above this lies the psychological $24 level.
• There are several resistance levels between the current price and $24, making it challenging for the market to surpass this point without a significant catalyst.

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Silver, unlike gold, is heavily influenced by industrial demand, so it does not act in the same manner as gold, which is used for wealth preservation. Despite this, the market does have a strong support base, with the $23 level and the 50-Day EMA being significant support levels. The market is overdone at this point, and pullbacks should be expected, though I am not overly bearish on the metal.

Market Will Continue to be Very Dangerous

The 200-Day EMA is the critical support level, and it sits just below the $22 level. If silver breaks down below this level, then it could be facing significant problems. The market is very volatile, which is normal for silver, so position sizing will be critical. Overall, the market is in a state of uncertainty, with buyers and sellers struggling to push the price in either direction. As a result, traders should be prepared for continued volatility until a significant catalyst drives the market in one direction or the other.

Regardless, this is a market that I think will continue to be very dangerous, especially as we are trying to figure out whether or not we are going to see enough momentum to go higher, and therefore if we do see a sudden selloff, you should keep in mind that the silver market is much less liquid than the gold market, and you may see a drastic oversold condition. At that oversold condition, I would be interested in buying, but right now silver is one that we need to either see a sideways action, or perhaps some type of pullback that offers value. Regardless, silver should also be traded through the prism of the US Dollar Index, as there can be a major negative correlation between the 2 markets over the longer term. In general, I like silver, but not at this level as it is too expensive.