- Silver initially pulled back a bit during the day on Friday but ended up turning around and showing signs of strength again.
- After all, we have a significant amount of support near the $23.25 area and have seen the market bounce from there multiple times over the last couple of weeks.
- We had rallied quite aggressively to get him to this area, so it does make a lot of sense that we would have to work off some of the froth.
Silver is seeing a good amount of bullish pressure, right along with its cousin gold. Markets do not go in one direction forever, and of course, silver has been manipulated multiple times in the past, by bigger banks such as J.P. Morgan which has paid millions upon millions of dollars in fines for doing just that. Remember, the paper silver market is not the same as the physical silver market, and that’s why there is a massive premium to be paid if you are buying physical silver right now.
Noise Ahead
Because of this, I think that the silver market will continue to offer buying opportunities every time it dips, and now that the 50-Day EMA is starting to reach the $23 level, that will also offer quite a bit of support. It’s probably worth noting that the area right around the $24.50 level has offered a significant amount of resistance. If we can break above there, then it’s likely that the market could go to the $25 level. The $25 level of course is a large, round, psychological figure, and an area where we’ve seen a lot of noise in the past.
Furthermore, it seems like every time we get above $25, J.P. Morgan suddenly gets another fine. It’ll be interesting to see all plays out this time, but with the inflation roaring the way it is, it’s possible that we could see silver finally break through there and head back toward the highs again. On the other hand, if we were to break down below the 50-Day EMA, then the market could look to the $22 level, which could coincide quite nicely with the 200-Day EMA. Either way, you are going to get a lot of noisy behavior, but the antidote for that is to trade in reasonable position sizes.
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