Silver continues to look bullish, although it is also a bit stretched at this point in time. The market will continue to wait for the FOMC Meeting Minutes and will also pay attention to the reaction of the US dollar in general.
Silver has rallied slightly during the early hours on Wednesday as we continue to see upward pressure, but I think at this point in time, the market is likely to try to break above $30 level, which of course is a large round psychologically significant figure in an area that caused some problems on Tuesday. This is a market that has been very bullish over the last week or so and I do think at this point, we have gotten so far ahead of ourselves that a little bit of a pullback I don’t think would be a huge surprise and I don’t necessarily think it would be unhealthy. At that point, we would have to be looking at this market through the prism of perhaps offering value.
Ultimately, this is a scenario where if we were to break above $30, then we could go looking to the $31.50 level, possibly even the $32 level. If we do pull back from here, I’d pay attention to the 50 day EMA because that of course is an indicator that a lot of people watch anyway. And then after that, the $28.50 level offer and support also. I have no interest in shorting silver, although I don’t necessarily want to chase silver all the way up at this extended area, at least in the short term. All things being equal, this is a market that I think continues to see a lot of value hunting if and when it presents that opportunity, as has been the case for some time now.
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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.