- During the early hours of Tuesday, silver pulled back a bit to show signs of weakness and dipped below the $31 level.
- However, we have seen a significant turnaround since then and the market looks as if it is trying to rally a bit.
- The $31 50 cents level is essentially where we are as I record this video, and it's basically in the middle of the overall range that we have been in lately.
The range as I see it at the moment is with the $30 level offering support and the $32 50 cents level offering significant resistance. The $30 level being broken to the downside would be significant not only due to the recent market action, but the fact that the 50 day EMA sits there. In that environment, I think metals in general struggle. Because of this, it is likely that we are going to continue to see a lot of attention to see noisy moves.
Silver Continues to Show Signs of Life
However, there's really nothing on this chart to suggest that suddenly silver market is going to fall apart. It's also worth noting that during the Tuesday session, the gold market has turned around quite significantly and looks somewhat strong and stout.
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If that continues, it's very possible the move in gold will just drag silver right along with it. Remember, silver is much more volatile than gold, and of course the contract is bigger, so you have to be cautious with your position size.
A breakout to the upside could occur due to interest rates falling. It could also occur due to geopolitical concerns and of course, the US dollar if it starts to slip. That being said though, keep in mind, silver is also an industrial metal.
So, it does have a little bit of its own mind at times. And that's part of why most traders actually prefer to trade gold, but you can get more returns in silver as things stand right now, it looks like it's trying to build up the necessary kinetic energy to finally break out to the upside.
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