Silver Forecast: $80 Fair Value Holds As Rates Pressure The Metal Market

• Silver continues to be very noisy during the trading session on Monday as we initially sold off but have turned back around to show signs of life.

• Keep in mind that interest rates continue to be at major and very high rates, currently above the 4.60% level on the 10-year note.

• That is very large and works against the non-yielding assets such as silver quite aggressively.

That being said, I do think that we're in an area where people will start to look for some type of value here. After all, silver has a serious supply and demand issue as there is not enough silver out there. We've recently been consolidating between $70 and $90 with the silver market seemingly finding something close to fair value at $80.

Technical Levels and Geopolitical Feedback Loops

The 50-day EMA is just above and if we can break above the $80 level then we could go look into the $90 level. If we turn around and break down below the $70 level, then the 200-day EMA comes into the picture.

I think quite frankly silver eventually goes much higher, but at the same time we have a lot of concerns when it comes out of the Middle East and as interest rates continue to skyrocket due to concerns about energy inflation, that is a negative feedback loop that traders will continue to punish silver for. If and when we ever get some type of resolution to the entire situation in the Middle East, that is probably where silver really starts to take.