Silver markets finally stabilize during the trading session on Thursday as the markets finally slowed the massive selling pressure that had been so pervasive the last several sessions. The markets continue to pay close attention to the US dollar, and what it is doing. Silver is very sensitive to the greenback, as it is priced in that currency, and the contract tends to be very volatile to begin with. The silver market is notorious for being erratic, so the most recent move will not have been a huge surprise.
Keep in mind that the silver markets will move not only based upon the dollar, but also the industrial use case. If we continue to see the potential lockdowns around the world, then it stands to reason that the industrial usage will be cut down. The markets continue to focus on momentum more than anything else, as the fear trade took over. I don’t really like the idea of buying silver, but a bounce would not be a surprise to say the least. The silver markets can have a rip to the upside with lack of liquidity, especially with it getting close to the holidays, which are thin trading – the later we get into December, the more likely we are to see a lot of jumps and bounces.
I wouldn’t be bullish until we get above $24, which would take a lot of effort to get there. In fact, I would be a bit surprised to see that happen, but the most likely of prospects would be that we bounce and then show signs of exhaustion that I will be selling. The silver market would desperately need to see a big opening trade come back into vogue, and therefore we would need to get a lot of ‘covid fear’ out of the psyche of the markets.
The jobs number coming out of the United States on Friday will cause a lot of noise, mainly due to its effects on the greenback. If the silver markets jump, I will be looking at a chance to sell early next week. On the other hand, if we were to break down below the bottom of the range for the last couple of days, then I anticipate that the market will go looking to challenge the crucial $22 level.
