Silver Markets Continue to Drift Towards Major Support

Silver markets have broken down again during the trading session on Friday as the US dollar continues to strengthen and quite frankly a lot of risk appetites take a beating. If that is going to be the case going forward, it is very likely that silver will get crushed, as there is such a highly negative correlation between the two markets, and therefore I think you have to be very cautious about what is going on in the US Dollar Index.

SILVER Video 31.01.22

Silver is also an industrial metal, so you need to be cautious about the demand part of the equation. All things been equal, I think that any bounce at this point in time will more than likely be a noisy mess than anything else, but it is worth pointing out the fact that we have seen a significant lowering of the highs every time we go forward. In general, this is a market that every time it rallies, I will be looking to fade especially as the US dollar has been so strong for quite some time. I would anticipate more strength coming from the greenback given enough time, so therefore I think it is only a matter of time before silver suffers as a result.

To the upside, anything above the 50 day EMA could offer a short-term trading opportunity, but I do not trust this market enough to expect some type of break out anytime soon. With this, keep your position size small which is almost always good advice when it comes to trading silver, as it is such a volatile instrument under the best of times.

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