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The silver markets broke out during the previous week as the $30 level has finally given way. Coinciding with this $30 resistance level is a massive downtrend line from the absolute highs back in the month of May.
At the same time, it looks as if the $26 level is offering massive support for silver. The support level probably goes down to the $25 level, as it is a large round number. The market looks extremely healthy at this point in time, and now that we have this downtrend line where the market stopped on Friday showing up, this makes a perfect spot from which to make a decision based upon weekly candles.
If we can get a daily close above the top of this weekly candle, this should completely free help the silver markets to run to the $36 level. Above there, we see $43 and $48 as the next two targets. Simply put, with central banks around the world looking to ease monetary policy, it's very likely that precious metals will gain overtime.
While the silver market will certainly gain, gold markets will probably do a bit better. This is essentially because the silver markets have the constraint of industrial demand as well. As the world economy goes into slower motion, there will be less and less demand for industrial metals. However, as silver is a precious metal as well we should see fairly significant demand over the next several months.
Even if we get a bit of a pullback at this point in time, it looks like the $30 level should be supportive. We see a fully no reason or signal to consider selling silver at this point in time, and would do it until we got at least a daily close below the $25 level. In the meantime, this market looks like it is winding up for a serious move north.
Without a doubt, we plan on joining this rally, and we think that the Federal Reserve easing monetary policy in September will be a massive catalyst for much higher silver prices. On Friday, there is a speech that the Chairman of the Federal Reserve will be giving in Jackson Hole, Wyoming that could give the markets a clear and concise signal as to whether or not the Federal Reserve is going to ease in the short term, and this will have a massive effect on the precious metal markets. Because of this, we may see the real move on Friday.