Silver markets went back and forth on Wednesday as we continue to hang about the 50-day EMA. You should keep in mind that silver is quite a bit more volatile than gold, so you need to be cautious with your position size. Nonetheless, this is a market that I do believe continues to see plenty of buyers on dips, if for no other reason than the fact that the US dollar is having a little bit of a rough go.
You should also keep in mind that the silver market is highly influenced by industrial demand, which is something that is worth paying attention to. PMI figures and ISM numbers are worth paying close attention to in order to get an idea as to whether or not there will be demand for silver, and other industrial metal such as copper. While I know that some people use silver as a precious metal, the reality is that a majority of it goes into industry.
To the upside, the $23.50 level should continue to offer plenty of resistance, as we have seen more than one attempt to break above there but have failed each time. Because of this, it is worth noting that the market will probably continue to see a lot of noisy behavior but ultimately, I think it is probably only a matter of time before we have to make some type of more significant decision. If we do break down, it is the $22.60 level that we need to pay attention to. If we do, then it is likely that we will go looking towards the $22 level.
Keep in mind that your position sizing is crucial for trading silver, due to the fact that it is so noisy and volatile. Ultimately, this is a market that I think given enough time will probably continue to grind away at the 50 day EMA, perhaps waiting for the jobs number to give us an idea as to what is going on with the US dollar. Ultimately, expect a lot of noisy behavior, right along with the idea of hesitation at times. Once we do get the breakout, regardless of which direction, we should see a rather rapid movement in that direction.
