Silver Technical Analysis
The silver market is slightly positive after initially pulling back just a bit during the early part of the Tuesday session, as interest rates are starting to roll over. This is a main driver of the market at the moment, as energy inflation continues to be a major factor in the overall action we are seeing in markets everywhere.
The $60 level continues to be a major support level. It is a large, round, psychologically significant figure, but it is also an area that, recently, about a month ago or so, had seen buyers jumping in to defend. With that being said, we will have to wait and see whether or not we continue to stay in the same consolidation area or if something breaks here.
Watching Interest Rates Closely
This, for me at least, is all about interest rates and what they are doing. Interest rates rising typically work against silver, but we are starting to see a little bit of a rollover, so maybe that gives the opportunity for a bit of a reprieve here.
Longer term, I like silver a lot. There is plenty of demand for silver as far as industrial use is concerned, and the resupply of silver stock is not very aggressive these days, as has been the case for some time now. Certainly, at one point or another, it seems like demand very well could overwhelm supply, and we saw a little preview of that about a year ago.
Ultimately, I like the idea of buying dips from a longer-term standpoint, but in the short term, I think we have a lot of volatility ahead of us.
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