Silver Markets Struggle

Silver markets have struggled a bit during the trading session on Wednesday, although we did bounce slightly. That being said, it is not a very convincing bounce, and it is likely that we will continue to face headwinds as silver is not so much in inflation hedge, as it is an industrial use case metal. The market is currently sitting between the 50 and the 200 day EMA indicators, which has a bit of a squeeze effect on price. At this point, we are going to have to wait and see whether or not we get an opportunity to play a bigger move, or whether we go sideways for a while.

SILVER Video 17.02.22

With so much uncertainty around the world, it does make a certain amount of sense that silver would be a difficult bullish trade. For myself, I believe that it is probably best left alone until we get a bit of clarity, and I will simply trade in whichever direction we break, be it above the 200 day EMA or below the 50 day EMA.

Keep in mind that the silver markets are highly sensitive to the US dollar as well, as they are extremely negatively correlated. Because of this, you must keep an eye on the US Dollar cap Index, and what the dollar is doing in general against most currencies. If the dollar is rising, as a general rule I do not like buying silver. I understand that both can go higher at the same time, but I likely to buy gold in that type of scenario because it is typically a safety play. If the US dollar really starts to spike, that will be toxic for silver 9 times out of 10.

For a look at all of today’s economic events, check out our economic calendar.