Silver Markets Testing Recent Resistance

Silver markets have rallied rather significantly during the trading session on Monday to reach towards the $23 level, and perhaps even more importantly, the top of the candlestick from last week that marked the highest trading level for that timeframe. We have the 50 day EMA above as well, which of course is sloping lower and will attract a certain amount of attention. Because of this, I think this is a very tentative place to be if you are long of silver. Quite frankly, silver has continued to make lower highs for some time, although we are obviously sitting on a major support level.

SILVER Video 08.02.22

Speaking of that support level, it starts at the $22 level and then extends down to the $21.50 level. Anything below there would be a massive selling opportunity, because it would be a breach of so much longer term support. At that point in time, I would assume that the market could drop to the $20 level rather quickly. However, if we break above the 50 day EMA, it is possible that we could go looking towards the 200 day EMA above, which sits slightly below the $24 level.

I do not think we get above there, unless of course we get a complete selloff of the US dollar, something that is not very likely in this environment. Because of this, I suspect that it is only a matter of time before silver sells off and goes looking towards that support level yet again. In fact, we are already starting to see a little bit of weakness midday on the short-term charts. If I had to trade a precious metal to the upside right now, I would be much more comfortable with gold.

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