The minor range is $61.74 to $55.56. Its 50% level at $58.65 is the nearest upside target. Trader reaction to this level will set the tone.
A sustained move over $58.65 will indicate the presence of counter-trend buyers. If this creates enough upside momentum, buyers could try to break out over the two main tops at $61.74 and $62.45. Overtaking these tops could drive the market into a short-term retracement zone at $63.81 to $65.75. Inside this zone is the 50-day moving average at $64.41.
A failure to overcome the pivot will signal the presence of sellers. This could lead to a retest of last week’s low at $55.56.
What to Watch
There is no fresh news driving the early move. The trade is coming from the yield pullback and the dollar’s retreat from last week’s high. If the 10-year yield continues to work lower and the Dollar Index breaks last week’s low at 101.58, silver buyers have a chance to test $58.43 with momentum behind them. A recovery in either market would put the focus back on $55.40.
For spot silver, with the main trend down on the swing chart and the market below the 50-day moving average, my bias is to the downside. I will be watching the reaction to the pivot at $58.43 to determine if seller rejection of the level leads to another round of selling or if a breakout over the pivot leads to a counter-trend rally, thereby weakening my bearish outlook.
For December Comex silver futures, my bias is to the downside, but this outlook will weaken if counter-trend buyers overcome the pivot at $58.65.
More Information in our Economic Calendar.