Silver Technical Analysis
The silver market jumped during the trading session on Wednesday as ceasefire was agreed upon in the Middle East, sending rates plunging. This, of course, helped silver because silver is a non-yielding asset. Higher rates tend to work against it as the “cost of carry” is negated.
Now, we’re looking at the 50-day EMA being challenged. It’s probably worth noting that we are up almost 8% as it is, so chasing silver here is probably very difficult. Looking for short-term pullbacks that show a bit of a bounce that you can get on the right-hand side of the V is probably the way forward, to at least somewhat control risk in this impulsive move.
Breaking Through Consolidation
The $70 level is a floor in this market, from what I can tell, but it has been violated a couple of times. Above the $80 level, things get interesting because we will have broken through the middle of the larger consolidation area, and it could open up a move to $90.
That being said, I think if you’re not involved in this move already, you probably need to wait for short-term pullbacks to at least find a little bit of value. Chasing all the way up here is probably going to be very difficult. Ultimately, I am bullish. I just need to see a little bit of value. I don’t want to pay all the way up at the 50-day EMA when I might be able to buy silver $1 lower, for example, as it at least gives you more breathing room with your position.