Silver Markets Trying to Stabilize

Silver markets have gone back and forth during the course of the trading session on Monday to show signs of hesitation. The $22 level underneath has offered support, and therefore I think it does make a certain amount of sense that we would see a bit of hesitation in this area. Whether or not we are going to be able to bounce from here is a completely different question, but it is a bit of an oversold condition at the moment. With that in mind, I think it makes quite a bit of sense that a little bit of a bounce happens, but I am not interested in buying this market until we clear the $22.80 level, because that would completely wipe out the negativity on Friday as well.

SILVER Video 01.02.22

Even if we break down below the $22 level, it is not necessarily a break down that will have follow-through. The $21.50 level is the bottom of the overall “range of support”, and therefore I think it is very difficult to imagine that we simply slice through that major barrier. However, if we were to do that then it would obviously be a huge negative for silver. On the other hand, if we break out to the upside, then we may go looking towards the 50 day EMA above, which currently sits at the $23.19 level.

All things been equal, you need to pay close attention to the attitude of markets in general, because the US dollar has a huge negative correlation to the silver market in general as silver is considered to be “riskier” than a lot of other assets. With this in mind, pay close attention to that US Dollar Index.

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