- Silver was somewhat bullish during the early hours on Wednesday, but quite frankly, this is a market that continues to see resistance at the same area.
- The $32.50 level continues to be a major barrier to get above and right now, it doesn't look like we can do so.
- After all, we've given up about a third of the gains during the session, and it is in that very same area.
The relative strength index shows a bit of divergence, as do a few other oscillators, so we might be just simply running out of momentum. This would make a certain amount of sense, considering that even though there are a lot of reasons for gold to go higher, silver is a little bit different in the sense that it is an industrial metal.
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A pullback at this point does make a certain amount of sense, and I would look at two different places for potential bouncing, the $31 level, and then the $30 level, which also features a 50 day EMA. If we were to turn around and break above the $32, 50 cents level on a daily close, then I think it opens up the possibility of a move all the way to the $35 level, as it seems like silver has a proclivity to move around in $2, 50 cent increments over the longer term.
We are Still in an Uptrend Overall
While all things being equal, we are still in an uptrend overall, so I don't necessarily want to fight that, but I recognize that you might be better served waiting for some type of pullback in order to take advantage of cheap silver. After all, it's like anything else, you don't want to pay more for it than you absolutely have to. At this point in time, I'm still bullish on silver, but I also recognize we've got some work to do to get above the $32.50 region.
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