Silver markets initially went sideways during the trading day on Friday, but then broke above $16 in a sign of strength. I believe that the “risk on” trade comes back into play, and when I look at the longer-term charts I cannot help but notice that the $15.50 level is an area that we have not been ill to close below on the weekly timeframe for almost 2 years. Because of this, the pullback and the subsequent bounce could have been anticipated. Breaking above the $16 level is the first sign that we could go to the $16.50 level, and perhaps even higher.
Pay attention to the US dollar, if it continues to fall in general, the markets will favor precious metals overall. I believe that Silver goes higher over the longer term, but I also recognize that the volatility will continue to be an issue. The $18 level above is massive resistance, which is my longer-term target, but I recognize that it will be very volatile between here and there. I believe that the best way to trade the silver market is through physical silver, or perhaps even the CFD market in general. This is a market that continues to be noisy, but I think the buyers have made their intentions known yet again. If we were to break down below the $15.50 level on a daily close, that would be enough to test the $15 level underneath. A breakdown below there would be catastrophic. Overall, I think we continue to see a lot of noise, yet buying pressure.