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Silver Price Forecast – Silver Markets Give up Early Gains

By:
Christopher Lewis
Updated: Feb 16, 2021, 16:22 UTC

Silver markets initially tried to rally during the trading session on Tuesday but gave back the early gains near the $28 level. By doing so, it shows that we are still running out of momentum.

Precious metals trading.

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Silver markets have gone back and forth during the trading session on Tuesday as the $28 level has caused quite a bit of resistance. Ultimately, we ended up forming a bit of a shooting star and that does suggest that we could pull back into the previous consolidation range. The $26 level underneath should be supportive, as it is not only an area where we have seen a gap in the past, but we also have the 50 day EMA reaching towards. Technically speaking, this should be an area that continues to attract a certain amount of attention.

silver

Silver is in a bit of a strange scenario right now, due to the fact that there are concerns about inflation down the road, but perhaps more importantly for the silver market is the fact that if there is a ton of stimulus coming, it should in theory drive up the industrial demand for silver. Quite frankly, part of the biggest problem during the trading session was probably that yield started to rise in America, and that does make the US dollar little bit more attractive. In that scenario, a lot of managers will tend to buy paper assets instead of hard assets, because you do not have to worry about the cost of storage when you can simply sit back and collect yield.

All things being equal, this is a market that I think does go looking towards the $30 level over the longer term, but we have some work to do before we can get there. I would look at short-term pullbacks as more than likely offering value

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

About the Author

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.

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