- During the trading session on Friday, we saw silver all over the place, and I’ve had to change my analysis for the short term multiple times.
- In general, I think you’ve got a situation where traders will continue to look at this through the prism of a market that is trying to sort out whether or not it wants to be a precious metal, or if it wants to be an industrial metal.
- I think you could probably say that during the Friday session, most people are probably focusing on the industrial part of the question.
Volatility Ahead
I think no matter what happens next, you’re going to have a lot of volatility ahead, and you have to keep that in mind. The jobs number being a little bit uglier than anticipated and of course has people somewhat concerned, as perhaps the slowing US economy could very well cause less demand for silver, and this is something that must be kept in the back of your mind. Industrial usage of silver might drop, and I think that might be part of what we are looking at here. Furthermore, the US dollar, although very weak at the moment, seems to at least be trying to put up a bit of a fight. With this, I anticipate that you probably have to look at this through the prism of another issue, but longer term I think you probably still have to look at the longer-term technical analysis to navigate this market.
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Looking at the long-term technical analysis, we are still very much in an uptrend, and I would pay close attention to the 50 Day EMA near the $31.50 level. I would also pay close attention to the $31 level, because it can also offer support. Nonetheless, there seems to be a massive amount of resistance near the $33 region that I think will be very difficult to get above. Because of this, I think a short-term pullback makes a lot of sense, and you can look at one of those couple of levels as a potential buying opportunity on a bounce.
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