The Silver markets broke down rather significantly during the trading session on Wednesday, as the US dollar showed a lot of strength. There was a lot of headwinds in the currency markets when it came to precious metals, and silver reach down to the $13.30 level, an area that has been important more than once. I think ultimately though, we will continue to try to find reasons to go higher, and I do believe in the viability of the silver rally over the longer-term. I think that silver may be helped by non-US denominated markets, as silver will most certainly continue to strengthen against the British pound and the Euro. That has a bit of a knock-on effect over here, but this market will probably rally much lower than the other ones.
If we could break above the $16.60 level, the market could very well go much higher. I believe that short-term pullbacks continue to offer buying opportunities, and I like the idea of owning physical silver. Short-term traders could use the CFD markets or even the futures markets but recognize that we will probably not see major moves in the short term. I think that the $16 level underneath is a significant support level, and I believe it is more of a “zone” that extends down to the $15.50 level. I don’t have any interest in shorting this market, although I am the first to concede that we very well could fall to lower levels. I look at that as value longer-term though and will continue to do so.