Silver Technical Analysis
The silver market has been a bit negative in the early part of the trading session on Thursday, and we are breaking below the $60 level. This is the first sign of potential problems in this asset.
It is interesting to think that traders will continue to see this play out in the sense that rising interest rates in the United States continue to climb while pricing pressure in silver continues to drop. Keep in mind, this is a market that is very highly sensitive to interest rates and, by extension, the U.S. dollar.
Demand Zone Being Tested at the Moment
Between $60 and $55 levels, there is a massive amount of demand based on technical analysis. Silver has a massive amount of demand attached to it, but this is where I am watching for some type of bounce. We will see if that holds. Quite frankly, we need rates to drop to make that more likely than not.
Rates are rising for a whole plethora of things, not the least of which would be oil, which took off today on renewed Middle East fears. So it all connects from the Persian Gulf into the bond markets and now into the silver pits.
I am bullish on silver long term, but I need to see some life in this market before I start buying it. I certainly do not want to short into a major demand zone. This area is worth watching at the moment, but trading it remains a bit difficult without a little help from the bond markets.
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