- During my daily analysis of the silver market, I’ve noticed that the market has reached a trend line that has been very important since the month of February.
- We have since bounced, but we are living in precarious times for silver at the moment, as interest rates in the United States continue to climb overall.
- After all, the 10 year yield just hit 4.46%, which can be somewhat toxic for precious metals.
Further compounding the issues for silver has been the fact that although there are certain geopolitical risks out there, and there is most certainly a significant amount of business optimism in the United States suddenly, we don’t necessarily have the industrial demand quite yet. With that in mind, it’s very difficult to get aggressive in the silver market, as it is so highly sensitive to interest rates, and of course industrial demand, which is still a bit of a question at this point in time.
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We could be at a major inflection point for the silver market, because we are testing the previously mentioned uptrend line, which of course is something that most traders will be aware of. With that being said, it’s also worth noting that just below the uptrend line we have the $30 level, which in and of itself will probably attract a certain amount of attention. Below the $30 level, we have the 200 Day EMA which is sitting right around the $29.50 level. In other words, there is a ton of support underneath.
All of that support is notable, because if we do break down below the 200 Day EMA, we will have just kicked off a massive head and shoulders pattern, that could send this market toward the $25 level. In that environment, I would be willing to be very aggressive in a short position, and of course would be very aggressive in a long US dollar position against almost everything.
On the other hand, if we were to break above the $31 level, I think at that point in time it’s very likely that the silver market will go looking toward the $32.50 level again, an area that has been important multiple times over the last 4 or 5 months.
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