Silver markets went sideways initially during the day on Thursday, sitting on top of the $16.50 level and showing signs of support. However, we broke down significantly, and it looks like we are ready to go down to the next major support level, which I see as the $16 level. The $16.25 level is of course can be supportive as well, as it is a minor sort level, but given enough time I think that we will certainly sliced through it. Any rally at this point should be a nice selling opportunity on signs of exhaustion, especially if we fail at the $16.50 level above, which is likely to be resistance going forward. Also, you should keep an eye on the US dollar, because if it rallies it will more than likely be a drag on silver and precious metals in general.
If we did break above the $16.50 level, I think a clearance of the $16.60 level sends this market looking towards the $17 level again. Ultimately though, I think that it’s easier to sell silver as the US dollar is going to work against it, and it seems like we cannot hold on to serious gains. I think at the $16 level though, there should be a lot of support and that could offer a buying opportunity. Most silver traders that I speak to our holding physical silver, and therefore it is not a market that most of my associates are trading with any type of leverage. Longer-term though, I do believe silver is a great investment.