- Silver shows signs of potential exhaustion near key resistance.
- While $51.50 remains a crucial breakout point, failure to hold above $50 could trigger a deeper pullback or signal a short-term peak.
Silver has been very noisy over the last couple of days as we shot straight up in the air. But it’s a market where it’s worth noting that we are kind of hanging around in the same area that I’ve been talking about over the last couple of days, with $50 extending all the way to the $51.50 level for resistance. At this point, the fact that we are giving back a little bit of the gains suggests that if we were to break down below the $50 level, we could perhaps drop toward the $48 level.
Can We Bounce
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The question at this point is whether or not we stay in this area and then bounce, or do we break down below the 50-day EMA to completely collapse? The other scenario is that we break up above the $51.50 level and probably send this market, I would assume, on a new level higher. This looks to me like a classic extension, distribution, sell, and then reattempt-to-continue pattern before we sell off. I wouldn’t short silver here; I’m just saying that’s something you need to watch because, quite frankly, if we lose the 50-day EMA, silver probably plunges for quite some time.
There are a lot of different narratives lifting silver at the moment, not the least of which would be central bank policy and fears of easing, but there’s a US dollar shortage out there. Furthermore, the EV sector likes silver, and the AI sector supposedly likes silver as well, but math and the data centers make no sense, and I think Wall Street is starting to wake up to that. So, it’s possible that silver may have peaked. We’ll just have to wait and see.
The $51.50 level, for me, is pretty important. Really above there, then I think you’re starting to talk about really ripping to the upside again. But the very interesting candle that we’re printing for the day on Tuesday just shows that maybe we’re not as excitable as we once were—and that actually is a good thing. I thought we needed more sideways action before continuing the uptrend. We’ll just have to wait and see if I’m correct, but this to me looks a little suspicious.
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