The silver markets had a pretty volatile session all things considered during the day on Wednesday, especially considering that the nonfarm payroll number comes out later today. However, what has me most interested in this market is the fact that we are above the $21.00 level again. The market seems to be drawn to this level, and if you look at the chart attached I have the $20.00 level marked, the $21.00 level marked, and the $22.00 level marked. In other words, I think this market has quite a bit of support and resistance at each $1.00 increment. That makes trading this market easy from a short-term perspective.
I believe that we can break the top of the range for the session on Wednesday, this market will trying to grind its way to the $22.00 handle. However, the key word here is “grind.” As you can see, I have circled the region just above current pricing from back in January. When I see that kind of noise, I recognize that it is going to be a bit of a fight to go higher. However, I would be the first to admit that the impulsive move recently has been rather impressive, and it has me thinking “long only.”
Nonfarm payroll will have an effect, so be aware of this.
Nonfarm payroll numbers will have an effect on this market place, so be aware of that. After all, silver is priced in US dollars, and if the value of the US dollar moves rapidly, it can have a knock on effect over here. However, I think that you should keep in mind that silver is also an industrial metal, and if jobs are being added in the United States at a significant rate, that should be good for industrial metals in general, silver included. On the other hand, if the US dollar gets beat up, its possible silver will gain there as well, as it will take less of these US dollars to buy an ounce of silver. Ultimately though, I do believe silver works its way towards the $22.00 level, and I would be very interested in buying pullbacks if we get one, especially near the $20.30 handle.
