Silver Markets Technical Analysis
Silver has pulled back just a bit during the early hours on Monday as we continue to see a lot of noisy behavior as we are hanging around the 50-day EMA. The 50 day EMA of course is an indicator that a lot of people will pay close attention to as it is quite often dynamic support and resistant. If we break down from here, then we could go looking to the $30 level, which of course is a large round psychologically significant figure and an area that I think a lot of options traders will probably be paying close attention to.
The question now is whether or not silver can turn around and rally, which quite frankly, I think what we are seeing in the precious metals markets is a little bit of a breath of fresh air due to the fact that the incoming Trump administration is more likely than not going to be anti-war. So, the geopolitical piece of the precious metal sector seems to be falling apart. So, with that being the case, it comes down to interest rates and the US dollar.
A lot of the usual suspects are in focus, and right now with a strengthening US dollar, it continues to put downward pressure here. I still think the $30 level will be crucial though, so I want to pay close attention to it. I wouldn’t short silver, but I also wouldn’t necessarily jump in with a huge position here either.
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