Baxia Markets
May 22, 2023

Silver drifts lower but sees buyers underneath

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Silver drifts lower but sees buyers underneath


The silver market is currently finding strong support within its existing range, indicating a high probability of continued back-and-forth price action. The 38.2% Fibonacci level has become a focal point for traders, and the market is closely monitoring this key technical indicator. Additionally, the $23.40 area, represented by the 50-Day Exponential Moving Average (EMA), presents a notable resistance level. However, if silver surpasses this hurdle, it opens up the potential for a move toward the $25 level. It is important to recognize the psychological significance of the $25 level, which may act as a short-term ceiling. A successful breach of this level would confirm the continuation of the overall upward trajectory of silver.


Conversely, a break below the $23.50 level would increase downward pressure and lead to a decline toward the 200-Day EMA. The 200-Day EMA, positioned just below the $23 level, provides additional potential support. Notably, this area coincides with the 50% Fibonacci level, further strengthening the case for a potential bounce.


Market participants should be aware that many traders currently view precious metals, including silver, as a means of preserving their wealth. This perception of "cheap silver" creates opportunities for traders. However, it is crucial to exercise caution given the high volatility of the silver market, even under favorable conditions. Proper position sizing is essential to manage risk effectively. Conversely, if the market demonstrates strong momentum in a trader’s favor, consider adding to the position to maximize potential profits. Nevertheless, traders should always exercise caution due to the inherent volatility of the silver market.


Silver market shows signs of upcoming momentum

Looking ahead, the silver market appears poised for a potential resurgence of momentum. Traders should closely monitor price action, paying attention to the ongoing support, resistance levels, and the psychological significance of the $25 level. While recognizing the potential opportunity presented by "cheap silver," traders must remain cautious and manage risk effectively. Capitalizing on favorable price movements while mitigating potential losses is paramount. Overall, the silver market shows signs of upcoming momentum, and traders should stay vigilant to seize potential trading opportunities.


At the end of the day, the silver market currently has robust support within its range. Attention is focused on the 38.2% Fibonacci level, while the $23.40 area acts as resistance. A breakthrough above this resistance level signals further upside potential, while a breakdown below the $23.50 level increases downward pressure. Traders should consider silver within the context of wealth protection while remaining mindful of its volatility. Monitoring market developments is crucial for successful trading strategies as momentum is expected to re-emerge.

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