Silver markets have been quiet during the trading session on Monday as we continue to see a lot of noisy behavior. Nonetheless, there seem to be plenty of buyers underneath.
Silver continues to have plenty of support underneath, and at this point, it looks like we are willing to simply go sideways and determine whether or not we can build up enough momentum to continue the overall uptrend. The $25 level is of course an area underneath that could offer a certain amount of support, if for no other reason than the psychology of a large, round, psychologically significant.
If we were to break down below there, then the market is likely to continue to see the 50-Day EMA near the $24.50 region as a support level, and then of course the $24 level underneath there, which is the epicenter of massive consolidation at the end of last year going into early this year. Ultimately, short-term pullbacks continued to offer plenty of value as there seem to be a lot of concerns out there about whether or not wealth preservation will continue to be a major theme along the way.
On the upside, the $26.50 level will continue to be a little bit of resistance, but at this point in time, the market breaking above there then opens up the possibility of a move to the $27.50 level above. Ultimately, this is a market that continues to be very noisy, and therefore I think you will have to be cautious about your position sizing. Short-term pullbacks offer buying opportunities, but you don’t want to jump into the market with a major position right away because silver is very volatile under the best of conditions, so you need to be cautious.
However, I certainly have no interest in shorting this market due to the massive bullish momentum that we have had for quite some time, and therefore I think you got a situation where eventually silver does continue to attract a lot of attention and therefore it’s just a simple matter of finding value in taking advantage of it. That’s been the case for some time, and therefore I think silver will continue to be a market that a lot of people run toward, especially if you see the US dollar loses strength as there is a negative correlation typically.
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Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.