Silver markets rallied initially during the trading session on Wednesday but found the $16.50 level be far too resistive to continue going higher. Because of this, we then broke down and fell towards the $16.25 level.
Silver markets initially tried to rally during the trading session on Wednesday, reaching towards the $16.50 level. We found enough resistance there to keep going higher, so now that we have pulled back from there and broke down to the $16.25 level, I think that buyers will probably come back into this market, interested in picking up value. I believe that the market should continue to offer these opportunities occasionally, but longer-term I do believe that the market participants will continue to horde silver in general. The overall attitude of the market has been “buy the dips” for some time, and I believe that there are massive amounts of support underneath to keep these markets afloat.
The biggest trick was silver is lower leverage for those who are trading longer-term time frames. If you’re a scalper on the futures markets, then perhaps you can use a large account and leverage to take advantage of the back and forth situation, perhaps using the stochastic oscillator as a guide as to where to go next. Ultimately, I think that we will eventually find a reason to rally, be it for safety, or simply the US dollar falling.
If we can break out to the upside, I believe somewhere around the $17 level we would find resistance again, and then of course the $17.50 level. This is a market that continues to be very noisy, so if you are a longer-term trader you are best served either trading the CFD market, or perhaps buying the commodity in its physical form, as you can ride through a lot of noise that way.
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.