Silver Forecast: Markets to Test Top of Consolidation

Christopher Lewis

Silver markets have gone back and forth during the trading session on Monday, testing the $16.00 level, an area that of course is a major barrier. If we can break above there, then the market could really start to take off as we attempt to break above the 200 day EMA. If we can break above that level, then it is likely that the market will go looking towards the $17.00 level, and then perhaps even the $17.50 level. On the other hand, the market could very well pull back from here and quite frankly that is what I am expecting to see.

The market pulling back from this area makes quite a bit of sense as it is the top of consolidation that we have been in for some time, which extends down to the $14.80 level, in a bit of a “buffer zone” that extends to the $15.00 level. That is an entire area that could offer plenty of buying pressure, and as the silver market tends to be a bit of a short-term market more than anything else, it would not surprise me at all to see that level tested.

Although I do expect a pullback from the top of the range, I would not be the looking to short silver, because there are far too many things working against silver at the moment. For example, there is the central banks around the world flooding the market with monetary policy, meaning that they are trying to debase fiat currencies. This typically works in the favor precious metals, although silver is a bit of a laggard due to the fact that it has a lot of industrial uses as well. Because of this, I think that silver will have some issues due to the fact that industry is shutting down and does not look ready to suddenly take off again. Yes, there is a little bit of hope out there for some sense of normalcy, but at the end of the day we are light years away from anything close to normalcy. The next couple of days will probably be somewhat bearish for silver, but I am looking to pick up closer to the $15 level than anything else. I would keep my leverage exceptionally low, or perhaps even look at physical silver from a longer-term trend more than anything else. Regardless, I have no interest in fighting the recent gains in silver.

Silver

About the Author
Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Currency Pairs:
Comments

Did you have a good experience with this broker? A bad one? Tell our team and traders worldwide about your experience in our User Reviews tab. Your email address will not be posted.

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments
Add Comment

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.