Silver Price Forecast: Silver Races Through the 50-Day EMA

NEW YORK (August 23) Silver has rallied significantly during the trading session on Wednesday, as it looks like we are breaking through the 50-Day EMA. That being said, the market also has to worry about a potential pullback, as the Jackson Hole Symposium takes center stage on Friday, and of course we will also have to pay attention to the idea of the “global green trade”, which needs silver. That being said, silver also has a massive negative correlation the dollar under normal circumstances, so you have to pay close attention to the idea of whether or not we are going to remain in trouble.

All things being equal, this is a market that I think will pay close attention to the 50-Day EMA underneath, and then the 200-Day EMA just below there, as both of these moving averages do tend to attract a lot of attention. Recently, we have seen a nice shot straight up in the air, but I also think that we are getting a little overdone in the short term. When I look at the long-term chart, I can still make an argument for hanging on to this trait, but the momentum is something I’m a bit concerned.

The $22.50 level underneath is significant as far as support is concerned, and it extends all the way down to the $22 level. Above, the $25 level, we do have a lot of noise, but could go looking to the $26.50 level. All things being equal, that would just simply be a continuation of what we have seen over the last several months. In general, I think this is a scenario where the market continues to see a lot of volatility, so you need to be very cautious with the position sizing of any trade you are in, and at this point I think you are probably better off simply waiting for some type of pullback in order to find value. That being said, the next couple of days could be rather noisy, so keep the situation with the Jackson Hole Symposium on Friday in the back of your mind. I certainly wouldn’t be a seller, but I did take some profit this morning.

FXStreet