Silver Forecast Today - 16/12: Silver Drops Hard (Chart)
Date
12/16/2024 4:28:45 AM
(MENAFN- Daily Forex)
In my daily analysis of the silver market, the first thing I see is that we did in fact fall rather viciously during the trading session on Friday, and now it looks as if we are trying to figure out what we are going to do next, as the market has been sold off quite viciously over the last couple of days. We have dropped about 4%, so I think at this moment we have to think about this through the prism of whether or not we have sold off enough to turn things around.
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The technical analysis for this market is somewhat neutral at the moment, but the longer term is certainly bullish. Furthermore, you can also make a bit of an argument that perhaps we are trying to form a head and shoulders pattern, so I'll be watching a couple of levels underneath quite closely. When you look at the chart, you begin to notice that we are in an area that could be rather important.
The $30 level is an area that I think will continue to matter quite drastically, as it is a large, round, psychologically significant figure, and an area where you would anticipate a lot of options trading. Furthermore, the uptrend line sits there, and we have bounce from the $30 level a couple of times. If we do bounce again, that would be a very strong sign as it is like a“floor in the market” that the sellers simply cannot break through. On the other hand, if we were to drop down below the 200 Day EMA, that would be an extraordinarily negative sign, and I think silver would probably start plunging at that point.
Keep in mind that there are a lot of questions to be asked about the global economy, and that of course has a direct influence on silver, as it is not only a precious metal, but it is also an industrial one. With central banks around the world cutting rates, it'll be interesting to see all this plays out what we are most certainly in an area where we could see either a significant bounce, or a significant breakdown. The next couple of days could be the determining factor of whether or not the trend continues.
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