- Silver, as you can see, has rallied quite nicely during the trading session here on Friday as we are looking to reach the 50-day EMA.
- It has been a fairly bullish session for silver in general, and that should not be a huge surprise considering that the US dollar has been clobbered for days.
- It does make a certain amount of sense that silver benefits from this.
Furthermore, you also see a lot of traders out there questioning whether or not global demand is going to pick up. So that is a little bit of an overhang and that might be part of why silver isn't doing as well as gold. But ultimately, and I think you've got a situation where traders are looking at this through the prism of whether or not they can play the weaker US dollar bid or do they just simply ignore that and start to look through the industrial perspective. Most traders forget that silver is an industrial metal as well, so make sure to pay attention to that.
Technical Analysis
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The 50 day EMA is currently right around the $32.50 level. And I think that it is an area that you'll have to pay close attention to. And therefore, if we were to break above there, then it's likely that silver really starts to take off, perhaps reaching $35. On a pullback, I would anticipate that the 200-day EMA comes into the picture for support at the $31 level, followed by the $30 level underneath there. All things being equal, silver is a very volatile and dangerous market at times, so do be careful with your position sizing because you can get into a lot of trouble here. This will continue to be the case for some time, so caution is the most important thing to employ here.
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