- Silver has had a fairly volatile session during the day here on Thursday as we initially drifted a bit lower only to turn around and show signs of life.
- By doing so, this suggests that the market is still finding plenty of buyers underneath.
- And with that being the case, I suspect this is a buy on the dip market.
Keep in mind that silver is not gold. And what I mean by that is it doesn’t behave the same way. Ultimately, this is a market that given enough time, I do think challenges the crucial $40 level just above, which of course is a large round psychologically significant figure that in and of itself attracts a lot of attention.
Buying Dips
With this, I would look to buying the dips as an opportunity to take advantage of what has been a very strong uptrend, partially driven by the shrinking US dollar, but as we get more trade deals coming through, that also suggests that there might be more in the way of industrial demand. With that being the case, I think it’s a perfect storm for silver, not to mention the fact that momentum itself, which is a big deal in the silver market, has been driving this market higher for quite some time. And the one thing about momentum is that you do not want to fight it. And that’s especially true in a thin market like silver.
Silver can just rip in one direction or the other when you trade it. So do keep that in mind the $37.50 level underneath for me is the floor in the market. So as long as we can stay above there, I don’t really think anything changes. I recognize this as a market that just is trying to break out, but it just doesn’t have that next catalyst. It will more likely than not get it sooner or later.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.