Silver Technical Analysis
The silver market rallied to kick off the trading session again on Thursday, but just as we saw on Wednesday, we have some resistance at the 50-day EMA, which also coincides quite nicely with the swing high in the beginning of July that the market has so far at least respected. This market is one that’s in the middle of consolidation and probably a lot of questions, mainly due to risk appetite being all over the place.
After all, the Middle East is still a big open question, and if that’s going to be the case, then we really don’t know what to do about inflation. That will keep rates elevated, and in that environment, a non-yielding asset like silver has some issues.
Technical Hurdles and Lagging Gold
This isn’t to say that silver isn’t going to be bullish down the road; I think it will. Quite frankly, there is barely enough industrial demand, and that demand continues to increase. So, I think sooner or later that comes into the picture, but as things stand right now, traders are more worried about more immediate problems, such as the Middle East.
So, I think it’s likely that a lot of people out there just don’t really know what to do. We are in the midst of what could be thought of as a bottoming pattern, or we’re at the top of a consolidation area, take your pick. Either way, it is not until we break above the moving averages, both the 50-day EMA and the 200-day EMA, that you would have a significant amount of momentum showing in the market. Ironically, gold has already made a move to break out of its range; silver is lagging.
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