Silver futures were only open for a small amount of time on Friday but also continue to pay close attention to the interest rate markets.
SILVER
Silver futures were closed for the bulk of Friday, but when we look at the charts it is becoming increasingly obvious that the $70 level is what you should be paying attention to as a bit of a floor. It is not that we cannot break down below there, we already have, but it certainly seems to be an area where traders are willing to jump in and get involved. Because of this, any pullback towards the $70 level will capture my attention.
But I do not buy the market just because it is close to there. I also watch the 10-year yield at the same time. The 10-year yield has been the anchor for where some markets are going recently, and silver is most certainly one of those markets.
The Impact of the 10-Year Yield
The 4.3% level in the 10-year yield is crucial to monitor. If we are above it, silver does poorly. If we are below that level, then silver has a shot at rallying. So what I would like to see for some type of setup is the 10-year yield drop below 4.3% perhaps even with some momentum and then the silver market shows itself bouncing from the $70 level. In fact, that is exactly what we saw on Thursday. That is a good signal.
Longer term, I think it is going to be difficult to hang on to silver, but once the war is over, we will then start looking for our next range. I believe that range will be between $70 on the bottom and $90 on the top. But again, we just do not know when that happens, and I do not even know if that happens. That is just based on previous price action.
The 200-day EMA currently sits at $62.82. That is a big floor. If we were to break that, I suspect silver goes looking to $50. That is not my base case scenario. It is just simply playing back and forth based on those yields in the 10-year note.