To learn more click here
The silver markets had a negative session on Thursday after the ECB failed to provide any type of "monetary bazooka" after its meeting. After the head of the ECB, Mario Draghi, stated that he was ready to do anything necessary last week, the markets got ahead of him and expected some type of magic for the session yesterday. However, as he disappointed, the US dollar got a serious bid as people ran for safety.
The silver markets of course fell, as the US dollar gained. Right before the announcement, you saw all of the risk assets around the world start gain suddenly. Once the announcement came out however, things reversed immediately and sent the markets into a "risk off" scenario. Now the real question will become whether or not the Federal Reserve has to act after the nonfarm payroll number today.
If the number is extremely poor, in a perverse kind of way this will be very good for risk assets as it would make the likelihood of the Federal Reserve acting in September very high. However, if the jobs number comes out right around the 100,000 added consensuses, we could have a selloff of risk as the markets will read that as possible reason for the Federal Reserve to stay quiet about easing its monetary policy.
The silver markets have been stuck in the consolidation range for a couple of months now, and we see the $25 level as the ultimate support if you will. Once we break below that, we would be aggressively short of this market as it would send silver into a tailspin down to roughly $15 level we can see.
Conversely, we could see this market will run to the $30 level, which we see as massive resistance. Any daily close above that would have us buying the silver markets aggressively as it would show a massive swing in momentum to the bullish side. In the meantime though, this looks like a very tight market and we should see very short-term setups in the $26-$29 range. If you are willing to trade very short-term, this market can be useful, but only if you're willing to keep an eye on the markets as things develop. This is without a doubt a short-term traders market.