- Silver has shown itself to be a bit lackluster during the trading session here on Tuesday as we gapped lower, we rallied enough to fill that gap and then just fell apart.
- That doesn’t necessarily mean that I’m looking to short this market quite the opposite.
- I think this could at least in theory be a nice buying opportunity.
I will be looking to see whether or not the $37 50 cents level holds. If it does on the bounce, I’m more than willing to be a buyer. After all, it’s a very important level. And if it doesn’t hold in that tells you something has changed. One thing is for sure. Silver is maybe a little overdone. And also at the same time, it’s not getting the push from gold, as gold is just sitting still for the most part.
Silver May Struggle for a Moment
So, it’s a little bit difficult for silver to truly take on because precious metals themselves are not necessarily strong as a whole. Now, keep in mind that silver is also an industrial metal. And because of this, I think you also have to keep in mind that traders might be looking at this through the prism of the trade war and what that may do to the idea of demand for silver. After all, silver is used in a lot of the new green technologies. So, I think that I could play a part here.
Also, you should keep in mind that traders are also looking at the US dollar. There’s a massive negative correlation between the two assets and if the US dollar starts to pick up strength as interest rates have risen recently, that can put a little bit of downward pressure on silver as well. Nonetheless, at this point, I’m ignoring all of that, although it’s in the back of my mind, I suppose. I am watching $37.50. Will it hold as support? If it does, then I’m a buyer of silver. Otherwise, I probably have to reset and rethink things.
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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.