• Silver continues to consolidate on Friday, holding above key support near $47 as traders watch the crucial $50 resistance level.
• A breakout could target $54, while a drop below $45.50 may trigger a deeper correction.

Silver has rallied a little bit during the early hours here on Friday as we continue to consolidate overall. This is a market that I think will continue to be very noisy, but there are a few levels that I'll be looking at closely. The first one, of course, is the $47 level, which has offered a pretty significant floor in the market over the last couple of weeks and has previously been both support and resistance.

We also have to watch the 50-day EMA, just above the $46 level and rise at the moment for support as well. To the upside, the $50 level is an area that a lot of people will be watching very closely because it's a large, round, psychologically significant figure. It's an area that over the last several decades, we have seen the silver market fail in that area.
 

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Really, at this point in time, I think if we can break above there, then it is likely to be a very bullish turn of events, perhaps opening up silver to retest the $54 level. On the other hand, if we break down below the hammer from two weeks ago, basically at the $45.50 level, then it's likely that we will see silver fall apart. At that point, we're looking at $42, possibly $40
 

Bigger Move Likely Coming

Ultimately, this is a market that I think is on the precipice of making a bigger move. We are going to have to work off some of the froth that had been thrown into the market as we shot straight up in the air, fell apart, and now are just going sideways. All things being equal, this is a market that I think will continue to see a lot of questions asked, but we also have to determine on the next impulsive move where the market will go. I think it's going to appear sooner or later, but the more time we spend going sideways, the better that actually is for silver and pricing it higher because it means people are accepting these higher prices. Keep in mind also that the Federal Reserve and its unwillingness to sound extremely dovish has a little bit of a dampening effect on silver as well.

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