Silver Forecast January 16, 2015, Technical Analysis

The silver markets as you can see initially fell during the open on Thursday, but then bounced around to basically hug the $17 handle again. There is a significant amount of resistance at the $17.50 level, so we need to clear that area on a daily close in order to start buying. Any pullback at this point in time should more than likely end up being a buying opportunity going forward. However, keep in mind that although gold has broken out, the silver market has basically sat still. That is an anomaly, as the two markets tend to move in the same direction. With that being said, we will have to wait and see which market is essentially “correct” at this moment in time, as the US dollar did very little, but gold jumped in the face of that.

The Swiss National Bank abandoned the currency peg that it had been involved in over the last several years against the Euro, and that of course has rocked the markets in general. So the question then becomes whether or not people are buying gold as a safety trade, or there is a real move in that market. With that being the case, it’s difficult to imagine the silver market not reacting one way or another.

The area above is massively resistive though, so having said that it’s likely that this market will be affected one way or the other by the gold markets, but it has not shown its hand yet. I think that it’s likely that the gold markets continue much higher, then silver will of course break out and you may want to be involved in this market ahead of that move. After all, the earlier you get in, the better the profits will be.

However, there is the possibility that we pullback of the gold market suddenly start looking soft, I would anticipate a move down to the $15.50 level given enough time as it would simply be a continuation of the consolidation area that we have been in for some time now.