Silver Markets Technical Analysis
Silver has been back and forth during the early hours on Thursday as we are most certainly stretched at this point. We have tested the highs that we made a few weeks ago and as a result it looks like we are struggling to break out.
When you look at the relative strength index, we are approaching the overbought condition as well. So, I think at this point in time, a short-term pullback makes a lot of sense. The $28.50 level underneath could be significant support, as it has been an area of interest multiple times in the past. On the other hand, if we do continue to go higher, the $30 level would almost certainly be an area that a lot of traders will pay attention to.
Thesilver markethas a long history of ripping to the upside and then collapsing. That’s why I’m always a bit cautious about trading silver. Silver is not like trading gold. There aren’t as many central bank and interest rate influence portions of the fundamental analysis although they do have a certain amount of influence.
But really silver is kind of its own animal because it is an industrial metal as well. And as of late, it’s more about green technology. Ultimately, I think the green technology probably drives demand higher from the longer term standpoint. But then again, we’ve been talking about a significant undersupply of silver for years now. So, I’m not sure why today would be any different. With that being said, I think this is more or less a buy on the dips market. You just can’t chase this type of move. It’s a really good way to get hurt, actually.
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This article was originally posted on FX Empire
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