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Christopher Lewis
Silver

Silver markets initially tried to rally during the trading session on Wednesday but have given back a bit of the gains. By doing so it shows that the silver market is going to continue to see resistance above, perhaps extending to the $17.50 level. At this point though, I’m not necessarily looking to short silver, rather I recognize the fact that the market is discounting silver a bit in relation to goal due to the fact that it has a heavy industrial component built in.

SILVER Video 05.03.20

The 200 day EMA is where the market is going back and forth, and that makes quite a bit of sense. The $17.00 level underneath offer support, just as the moving average does. In other words, I think that if we do drop from here it is somewhat limited. Silver has taken an absolute shellacking as of late, so to think that we are going to continue much lower is a bit of a stretch. Alternately, if the market does break above the $70.50 level, we could start grinding towards the $18.00 level. Central banks around the world are loosening monetary policy, and that does help precious metals but it’s going to send more flow into the gold market than silver. At this point, one of the trades that has worked has been buying gold while shorting silver in a bit of a “pairs trade.” I do believe in owning silver longer term though, so on dips I have been buying physical coins and bars. As far as levered assets are concerned, I would probably look for a little bit of a pullback before trying to go long, perhaps down as low as the $16.50 level.

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