(MENAFN- Daily Forex)

• Silver is stabilizing after a sharp sell-off, forming potential support between $47 and $50.
• A break above $50 could invite buyers, while a fall below $46.50 may trigger renewed weakness amid ongoing volatility and normalization in pricing.

Silver initially fell a bit during the trading session on Friday to reach the $47.25 level, only to turn around and show signs of life. By doing so, the market looks as if it is going to form a bit of a hammer for the day, but we'll just have to wait and see, and that, of course, is a good sign.

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At this point, if the market goes sideways, maybe between the $47 level and the $50 level, then that's actually a positive development. It's a market trying to find its floor right now after a massive sell-off. However, if we break down below the $46.50 level, I think things get ugly. Silver has no business being here; this has all been an attempt at a short squeeze. The differential between spot and futures prices is starting to collapse, which is a sign that normalcy is returning to the market.

Sooner or Later....Lower

If it's going to be a normal market, it's probably going down eventually. Short-term rallies look suspicious to me, but I'm willing to start buying again if we can get above the $50 level. The only thing you can probably count on here is a lot of volatility-which, to be fair, isn't unusual for silver-but in this environment, after dropping massively a couple of days over the last week and a half, I think you have to look at this as a market trying to determine whether it can regain momentum and, more importantly, confidence. In the short term, we're likely to bounce around, but the next impulsive candle could really tell the story here.

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