Longer term, I am bullish on silver, but I also recognize there are several things to work through at the moment.
Silver
The silver market continues to be very noisy, and we continue to dance around the $60 level. The $60 level is a large, round, psychologically significant figure, an area that I think will continue to be important, but it's also worth noting that this grind higher has been lackluster to say the least.
Top Regulated Brokers
Even if we rally from here—and let's be honest, we could—the reality is there are a lot of people out there that are watching the Federal Reserve and expecting the Federal Reserve to raise rates twice this year. That is ugly for the silver market, and I think ultimately, we have to look at this through the prism of the US dollar strengthening and the cost of carry when it comes to metals, as well as the fact that they are non-yielding.
Fundamental Regimes and Downside Targets
That being said, we have rallied a little bit as we head into non-farm payroll on Thursday, and that makes sense. Nobody really wants to get stopped out of a short position on some type of quick spike to the upside. Furthermore, Friday is a holiday in the United States, so trading will be limited.
I think rallies at this point in time continue to be selling opportunities at the first signs of exhaustion, and that's I think essentially what I'm waiting for here. I'm not a big fan of jumping into silver quickly, and I certainly don't like doing it with a huge position.
Longer term, I believe silver goes much higher, but we're not anywhere near that right now. We are not in the right fundamental regime, and this rally will only entice short sellers to get involved—again, that's assuming that it even continues. I do believe we will test $50.
Ready to trade our daily Forex forecast? Here’s a list of some of the Top Silver Trading Brokers to choose from.