- So far silver has initially rallied during the trading session on Tuesday, but you can see we’ve given back some of that momentum.
- That does make a certain amount of sense because when you look at the chart back in the middle of October, we saw a lot of noise between $33 and $35 above.
- There is going to be a lot of market memory to chew through in this area.
So therefore, I think you do have a high likelihood of this market going back and forth. Beyond that, we’ve also seen the U.S. dollar strengthen quite significantly during the U.S. session. And that will put a little bit of weight on silver.
I Still Prefer Gold
Contrast silver with gold, which had reached a new all-time high overnight. Then you begin to see why I always tend to side a little bit more with gold, although I do recognize that when precious metals get flying, silver brings huge rewards. Speaking of those huge rewards, this is a market that is extraordinarily volatile, and you should keep in mind that the contract size is bigger. So, make sure you’re sized appropriately. The $33.33 level underneath should continue to be support, but this little bit of a beat down later in the day does give a little bit of reason for pause.
I do think though, at the end of the day, it’s still very much a buy on the dip market. And I think that we will go looking at the $35 level eventually. I certainly have no interest in shorting silver, although if we were to break down below the $32 level, then we would have to look at the fundamental scenario out there. But right now, this just looks like more volatility than anything else.
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