- The silver market initially did try to rally during the session on Friday but gave back gains as we turned around to show signs of hesitation.
- Ultimately, this is a market that’s been very bullish, and we recently broke above a major resistance barrier in the form of the $33.33 level.
- This was an area that’s been important a couple of different times, and therefore I think it makes a certain amount of sense that it has “market memory” attached to it.
- In this environment, I would anticipate that buyers would be willing to step back into the market and pick up “cheap ounces of silver.”
To the upside, I still see the $35 level as a major target, as well as a major barrier. I don’t necessarily think that we get there easily, nor do I think that we blow through it easily. However, if we were to break above the $35 level, it could send the markets rising higher. We’ve only broke above the $35 level a couple of times in the past, and both times it led to skyrocketing silver prices.
Support Below
While I do believe that there is plenty of support near the $33.33 level, if we were to break down below there, I would start to look at the $33 level as support, followed by the $32.35 level. The $32.35 level is backed up by the 50 Day EMA racing toward it, and I think that is essentially the “floor in the market” at the moment. Anything below there would be a bit surprising, but most certainly could kick off much more aggressive selling.
I think at this point in time silver is simply taking its cues from the gold market, as the gold market has been racing higher quite quickly as well. In fact, during the trading session on Friday gold had touched the $3000 an ounce level for the first time in its history. It too has been pulling back a little bit during the session, allowing traders to take profit.
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