- Silver initially rallied to kick off the trading session on Friday, but we do have some concerns that we need to be very well aware of in the silver market, both from a technical and a fundamental standpoint.
- After all, the market does tend to be a bit noisier than gold, and this is a mistake that a lot of retail traders make in the sense that they assume gold and silver are the same thing and they are not.
The first thing to keep in mind will be the technical analysis with the $30 level offering a significant amount of psychological resistance as it had previously been support. Now that we are dancing around this area and pulled back a little bit, this tells me we probably have more of the same about to happen, more of this push and pull near $30.
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The $30 level is halfway between the 50-day EMA and the 200-day EMA as well. So, it kind of sits as a fulcrum for price. The time of year, of course, isn't that thrilling for markets. The liquidity remains a little bit underwhelming. So, with that being the case, I think the moves might be on the short-term scale is very erratic, but longer term probably not meaning much. Further compounding issues in the technical analysis sphere is the fact that $30 has already proven itself to be important more than once. And I think that will continue to be the case going forward. If we were to turn around and break down below the potential double bottom that we just formed near the $28.75 level, then I think technically speaking, this is a market that's broken.
If Silver Breaks
At that point, I would not be surprised at all to see silver go looking to the $26.50 level. One of the biggest problems you have won't even show up on the chart. And that, of course, is that the 10-year yield has been higher for longer, although it has given back a little bit recently, giving silver at least a little bit of hope. But keep in mind, silver is very sensitive to interest rates.
It does serve as a precious metal to an extent like gold, but the reality is silver is also an industrial metal, and that's something that far too many people ignore. So, with this, I think you continue to see a lot of push and pull, but I'm not bullish on silver again until we get above the 50-day EMA, which currently is right around $30.47. In the meantime, I think we go sideways with maybe more of a downward tilt than anything else. I'm not necessarily saying we should short the market, but if we did break down below this double bottom, I think that would be your signal to do so.
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