Silver markets had a positive session on Thursday, slicing through the $19.50 level. This is significant in my opinion, because we are also closing above the 50 day exponential moving average. As you can see on the chart, this moving average has been pretty reliable as far as resistance is concerned on the way back down from the highs in March. With that, I believe that the market will ultimately continue to go higher at this point in time, and trying to reach the $20.00 level. It is there where I would expect to see a significant amount of downward pressure though, and no matter what happens between now and the move, I would expect it to be choppy in this market.
The silver market has certainly been beaten down, but as a result I think there’s a bit of a value play to be had. Break above the highs from the session on Thursday, I believe that the buyers will step in and continue to push this market up.
I also believe that we are continuing to form some type of basing pattern.
I also believe that we are continuing to form some type of basing pattern, albeit in a very sloppy manner. This market should continue to bang around in this general vicinity, and I believe that pullbacks will continue to bring in buyers. After all, there is still a massive amount of quantitative easing out there, even though we have tapered off significantly. That should bode well for precious metals over time, if inflation can ever pick up which is something that we are still waiting on.
I ultimately believe that this market will go much higher given enough time, but it comes down to what your time horizon is. For me, I actually prefer to buy physical silver and just sit on it for years at this point. Ultimately, I believe that the silver market will go back to the $50 level, but that of course is going to take a massive amount of momentum in a significant amount of time. I think of this more as an investment and less of a trade.
