Silver markets rallied to kick off the week and continue to show signs of life. I think at this point it’s all about the US dollar, and the great proxy or even secondary indicator for this market is what the EUR/USD pair is doing. If it is rallying, then typically silver will rally as well as it works against the value of the dollar. I think pullbacks will find plenty of support near the $14.75 level, and I do think eventually we will try to break above the $17 handle. Until then, expect a lot of volatility but that’s nothing new for the silver market as it tends to move around quite rapidly.
Unless there’s some type of “risk off” event, I think that the value hunters are coming back into silver for longer-term move, and I certainly have been buying physical silver occasionally at these low levels recognizing that historically it is cheap when measured in both gold and US dollars, adjusted for inflation. Short-term traders should probably keep the position size small as the volatility will be rather drastic, but ultimately I do think that we are trying to form some type of bottoming pattern. Longer-term charts dictate that there is a lot of support underneath at the $14 level as well, so keep that in mind. Overall, value hunting seems to be the name of the game in the Silver markets over the last couple of weeks.