Silver markets rallied rather significantly during the trading session on Wednesday, breaking above the $17.50 level. I think that we will probably get short-term pullbacks, but that should give us an opportunity to pick up Silver “on the cheap.” I like the idea of buying dips as it offers an opportunity to dollar cost average, in a market that is obviously trying to break out to the upside. Eventually, I anticipate that the market will probably go looking towards the $18.50 level, the top of the overall long-term consolidation that we are currently trading in. A break above there sends the market much higher, looking towards the $20 handle.
Pullback should find plenty of support underneath, especially near the $17 handle, and I think it’s going to offer a bit of a “floor” in the market, and therefore it be surprised if we break down below there. If we did, that would be a very negative sign and have me thinking about selling silver. Until then, it’s a “buy the dips” and “long only” marketplace. Expect a lot of noise, but ultimately, I would expect to see a breakout given enough time. I believe that the $20 level will eventually be targeted as well, but we have a while before we get to those lofty levels. Physical silver makes an excellent way to play this market, and to take the leverage that we see in the futures markets out of the equation.