- Silver continues to see a lot of noisy behavior, as we are seeing quite a bit of volatility after the shot higher that we had seen over the last several weeks.
- All things being equal, this is a market that has been grinding back and forth over the last 5 or 6 candlesticks, with the $37 level above offering resistance, and the $35.50 level underneath offering significant support.
Silver is Not Gold
Keep in mind that silver is not gold, meaning that it doesn’t behave the same way every day. After all, the market has the price in the idea of both a precious metal and an industrial one, so with that being said, the market will have to pay close attention to what’s going on with the overall economy. All things being equal, the market continues to ask questions as to whether or not there will be more demand, and of course what’s going to happen with the US dollar. Ultimately, this is a market that I think will continue to have a lot of external factors causing chaos, which makes sense considering that silver is very volatile under the best of circumstances.
If we were to turn around a breakdown below the $35.50 level, then we could drop to the $34.75 level. This is an area that has been important over the previous consolidation area that lasted a couple of days. I think this is an area where people will start to see plenty of support there. On the other hand, if we were to break above the overall resistance barrier in the form of the $37 level, it’s very likely that silver will continue to go much higher, as we have seen a couple of times over the longer term charts. Anything above there opens up the possibility of the $40 level, and then possibly even much higher than that.
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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.