Silver launched during the trading session on Monday, looking for the $90 level again, as we see the same range play out overall. Silver remains bullish in general, but also dangerous.
Silver
Silver has launched during the trading session on Monday, trying to reach the crucial $90 level. This is a market that has been consolidating for a while between $70 on the bottom and $90. Since we're closer to the top of the consolidation range, a little bit of pressure could end up in the market.
Short-term pullbacks are buying opportunities with the $80 level underneath offering support, perhaps even sitting right at the 50-day EMA. I have an inkling to buy each dip going forward, but I also recognize that you do not want to get overly exposed to silver.
Building Market Confidence
I also recognize that gold has broken to a fresh new high over the last month or so while silver struggles. Silver had a traumatic session several Fridays ago and that continues to be something that we need to pay close attention to because I do think that the market is going to struggle to build that confidence.
At this point in time, confidence is exactly what we need. Longer term, silver probably does fairly well, but we are not going to have the astronomical returns that we had previously. Quite frankly, most of the people that were chasing silver the way they were had their accounts wiped out. That's how markets behave.
As long as we stay above $70, I think it remains buy-on-the-dip, but I also recognize that over-leveraging yourself is a great way to get blown up as traders found when they were up at $115 and a few hours later down at $80. Be cautious, but I have no interest in shorting here.