Silver Prices at Risk of Slipping into Another Air Pocket
- Silver prices punished to key support, but…
- Support on the verge of breaking, exposing another air pocket
- Next area of interest not found until the 14s should the metal close below 15.80
Silver prices were punished last week following the FOMC rate hike and hawkish guidance, with three rate hikes anticipated during 2017. The dive lower took silver to a target we had set in the 16/15.80 vicinity. So far, we aren’t seeing much of a response by buyers to defend this area, slipping through at the time of this writing. A failure to hold here sets silver up for further downside.
There was an air pocket we were previously focused on from the low 17s to 16/15.80. A clear break below 15.80 (closing daily bar below) exposes another air pocket. Looking to the left there isn’t any visible support until we arrive at the swing low from April at 14.79 down to swing highs created during December of last year around 14.50.
Should silver firmly trade into the eyed zone, we might not see a precipitous drop to the next set of levels, but we will maintain a bearish outlook as long as it stays beneath the once support now turned resistance at 16/15.80. Today could be important for this outlook as it tries to slip into the next air pocket, but a turnaround and daily close back above support would put this bias on hold for at least one more day.
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---Written by Paul Robinson, Market Analyst
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