Silver continues to be very noisy as Monday is a holiday in the USA. The markets continue to see a lot of questions asked of it.
Silver
Silver continues to be very noisy and on Monday had a little bit of an uphill battle anyway because it was Presidents' Day in the United States and that has a major influence on volume and therefore liquidity. We are sitting just below the crucial 50-day EMA. I think that's an area that's worth watching right along with the $80 level.
If we can clear the $80 level, then it opens up the possibility of a move to $85, but that's just more of the same and I think that makes a lot of sense because this is a market that just saw a ton of people get wiped out. I shudder to think about the amount of retail and prop firm accounts that were destroyed about 3 weeks ago with that massive 30% drop.
Physical Demand and AI
Because of this, a lot of players are probably on the sidelines looking for the next big trade or big signal and keep in mind that since the Great Financial Crisis, that's what trading's been: it's been about finding the next bubble. This was the latest one and now the question is whether or not the actual physical demand is going to validate this pricing.
I think it may not, actually, and the reason I say that is because we're starting to see a lot of grumblings out of the artificial intelligence world about how the numbers don't match up to reality for data centers. If that's the case, that takes part of the narrative away. Now, I don't believe that silver's going back to $12 an ounce. I don't think that's true at all.
I think we have a higher floor. I think we'll have to find out where that is. Right now, the market's trying to determine if that's $70. Right now, $70 is the floor, $90 is the ceiling, and it looks like we are going to go back and forth. So, if you're a nimble short-term trader, a range-bound system may be the best way to tackle what is going to probably be a choppy market for a while.
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