Silver markets have been very choppy during the trading session on Tuesday as we continue to trade thin volume. After all, it is a holiday week and therefore we have little in the way of volume. This means that the markets can get thrown around quite a bit. That being said, the market does seem to have support underneath, especially near the $26 level and the 50 day EMA which sits right around the $24.50 level. Ultimately, I think that short-term pullbacks will probably continue to be bought into, as the market could go looking towards the $28 level eventually.
SILVER Video 23.12.20
To the downside, the 200 day EMA sits just above the $22 level, and therefore I think that is essentially your “floor in the market.” The market has recently broken out of a four dollar range, and therefore it would extrapolate towards a move near the $32 level. Obviously, there are a lot of resistance areas between here and there, so that is a longer-term call more than anything else. I have no interest in trying to short silver because it has such bullish pressure underneath. Ultimately, the US Dollar Index is negatively correlated to the silver market, so if the US dollar does take a little bit of a beating, that will of course help silver rally.
I think that it is going to be very noisy along the way though, so I would not get overly excited about any particular move, due to the fact that there is such a lack of volume between now and the end of the year. News flow can cause major events in the market, but at the end of the day it looks like we have plenty of support.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.