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Christopher Lewis
Silver weekly chart, September 16, 2019

Silver markets initially tried to rally during the week but have since broken down pretty significantly as we are below the $18.00 level again. Underneath, there is a gap near the $17.50 level that could offer a lot of support, and quite frankly looking at the weekly chart is very easy to see that we had gotten ahead of ourselves. With all of that in mind I believe that it’s only a matter time before buyers come back, but after forming a massive shooting star during the previous week, it was apparent that the market had gotten far ahead of itself.

SILVER Video 16.09.19

Silver will continue to rally over the longer-term though but pulling back to at least the gap makes a lot of sense. Beyond that, we could even go down to the $17.00 level which is a large, round, psychologically significant figure, and of course the scene of the 50% Fibonacci retracement level which attracts a lot of attention in and of itself. This is a pullback that has been needed, and quite frankly it makes for a healthier uptrend given enough time.

The $20.00 level above is massive resistance, so at this point I think it’s only a matter of time before we try to get there, as markets like to test these areas. A pullback gives us the opportunity to build up enough momentum to make that move, and that’s essentially what we are seeing right now. With the ECB underwhelming with its cuts, it’s very likely that the precious metals markets will continue to get a bit of a pullback and this move makes quite a bit of sense.

Please let us know what you think in the comments below

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