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Christopher Lewis

Silver is a very interesting place right now because it has dipped below the $24 level. That being said, we have also broken back above it midday, so the question now is whether or not we can continue to hold on to some semblance of support? I imagine that this is going to be a very difficult market to trade over the next couple of days simply because we have so much in the way of noise out there that could cause major issues. With that being the case I like the idea of taking advantage of “cheap silver” on the whole, but I also recognize that we cannot necessarily rule out that the market could go lower. After all, silver has been highly negatively correlated to the US dollar, so pay attention to what is going on over there.

SILVER Video 16.10.20

At this point, one could make an argument for silver rallying, based upon the $24 level, but you can also see that the $23 and $22 levels have both offered support so do not be surprised at all if we have to test those areas as well. Longer-term, I do believe that silver goes higher and therefore I look it dips as opportunities to buy silver, but I do so in very small increments. To the upside I see a significant amount of supply near the $27 level, so I think that will be very difficult to break higher. However, it looks as if central bank around the world will continue to loosen monetary policy, so that of course helps the idea of precious metals rallying.

For a look at all of today’s economic events, check out our economic calendar.

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