- Silver has initially fell during the trading session on Tuesday, but then turned around to show signs of life again.
- By doing so, it looks as if silver is trying to break above the $27.50 level, which is an area that previously has caused a bit of resistance.
I do think that a pullback is probably more likely than not in the short term, just due to the fact that the Monday session was so ridiculously bullish. In other words, there is probably a need for the market to “breathe” at this point in time. The market will still see plenty of buyers from what I see though.
Underneath, I think we have the $26 level underneath offering support right along with the 50 day EMA. Remember, the $26 level was a major resistance barrier previously, and therefore a lot of market memory should come back into play in this general vicinity. Above, we have the $28.50 level and a significant resistance. That's an area that has been important multiple times going back decades and extends to the $30 level.
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The Massive $30 Level Above
The $30 level is a huge issue that it's only been breached twice. All things being equal, I think in the short term this is going to end up being a buy on the dips type of scenario. And as long as we stay above the $26 level, it's likely that we could continue to see upward trajectory play itself out.
If we were to break down below the $26 level, then it's possible that the silver prices could go down onto the $24.50 level, which is hanging around the 200 day EMA. In general, silver does tend to move on interest rates, which is actually working against it at the moment. But there are geopolitical concerns. And of course, people are starting to price in the idea of the Green New Deal demanding a lot more silver as well. All things being equal, I think in the short term we bounce around between $26 underneath and $28.50 above.
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