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Christopher Lewis

Silver markets have rallied rather significantly during the trading session on Friday, as we have pierced the 50 day EMA. If we can break above the highs of the Friday session it is very likely that we will continue to go higher, perhaps reaching towards the $27 level. The $26 level between here and there will be a certain amount of psychological resistance, but the real supply seems to be closer to $27.

SILVER Video 12.10.20

Unfortunately, this is all based upon the idea of stimulus, so there is still a significant amount of headline risk out there. Remember, politicians do not necessarily play the markets, so they will say stupid things at the drop of a hat. Because of this, you need to be very cautious with your position size, but it is looking very clear at this point that silver is forming a bit of a bottoming pattern, and therefore it should be paid close attention to. Because of this, and the fact that the candlestick is much bigger than the ones before it, I believe that the buyers come into play again.

However, if we were to break down below the $24 level, it is likely that we could go down to the $23 level, possibly even the $22 level. That would almost certainly have something to do with stimulus talks breaking down completely. At this point, I do not anticipate that we are going to see much clarity right away, but it certainly looks as if the longer-term uptrend is trying to reassert itself.

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

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