- The silver market has seen some volatility during Monday's trading session, with a gap higher at the open, followed by a pullback below Friday's shooting star candlestick pattern.
- This suggests that there is still significant resistance in the market, and that momentum may be starting to run out.
- With the market bouncing back and forth between the $23 level and the $24.60 area, any signs of exhaustion will likely result in selling pressure.
Looking ahead, if the market falls from here, it could potentially move down to the 50-Day EMA, which is currently at the $22.17 level and is rising. The 200-Day EMA had provided some support in the recent past, so the 50-Day EMA may also be viewed as a potential support level that many traders will be keeping an eye on.
On the other hand, if silver manages to break above the current resistance levels, it could open a move toward the $25 level and potentially even the $26 level. However, the $26 level has seen a lot of selling pressure in the past, so it could be difficult to breach that level. If we were to see this market break above that area, we could see silver really take off, because historically, once we break above this general vicinity, we have seen silver rocket toward the $50 level a couple of times.
It seems that the Market Will Pull Back
It's worth noting that silver is both a precious metal and an industrial metal, so its demand is affected by both factors. With the global economy showing signs of slowing down, industrial demand for silver could potentially decrease, which could impact the overall price of the metal. Industrial demand is part of what makes silver so tricky to trade in relation to gold, which is much more of a straight play on wealth preservation and perhaps sometimes the negative correlation to the US dollar. It should be noted that silver does have a negative correlation to the US dollar, but the correlation may not be as strong as you see in the gold market.
In the short term, it seems likely that the silver market will pull back, but there could be buyers waiting underneath to support the market. Traders should keep a close eye on the technical indicators and any developments in the global economy that could impact the demand for silver.
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