- Silver has gapped lower to kick off the trading week, dropped a bit, turned around and rallied rather significantly only to turn right back around and give back some of those gains.
- This is a microcosm of what we have seen in the silver market as of late, as we continue to see plenty of volatility.
- The 50 day EMA underneath should offer plenty of support as the 50 day EMA is widely followed.
At this point in time, I think short-term dips continue to offer buying opportunities and therefore, I think that's how this market plays out. If we were to break down below the $30 level, the market could drop rather significantly from that point, perhaps down to the $28.50 level. This is an area that will more likely than not be a massive support level.
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On a move higher, I'd watch the $31.55 level, as a short-term resistance barrier that if we can get above then we go looking to the $32.50 level. The $32.50 level is an area that's been a bit of a double top and now we have to wait and see whether or not we can break above that level. And if and when we do, that would be a very bullish sign. And I think you would see a lot of FOMO trading. Keep in mind that silver tends to move on interest rates and of course the US dollar in general. Remember, there is a lot of negative correlation between silver and the US dollar.
So, all of that being said, I think you have a situation where you will be looking for value that you can take advantage of. I don't have any interest in shorting silver, at least not in the current environment with the Federal Reserve cutting rates and of course a lot of people looking for some type of shelter from what is more likely than not going to be massive amounts of liquidity, which means that a lot of people will be looking to own “things.”
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