- During Thursday's trading session, silver experienced a decline following a period of considerable turbulence.
- Given the historical significance of this price range as both a support and resistance level, the market is likely to remain highly volatile soon. Traders will need to consider the market's "memory" and weigh both buying and selling opportunities.
- This typically means that you are going to see a lot of noisy behavior, which is something that is typical for this market, but these days seems to be typical for anything, even bonds.
Now, it appears that the $20.50 level is well-supported, but it will be interesting to see if it can hold. If it fails, prices could drop to the $20 level, which is a psychologically important price point and would attract a lot of attention from options traders. A further decline below $20 would be very negative and could trigger a strong bearish sentiment in the market.
Be Patient
On the other hand, if prices break above the recent high of the shooting star pattern from Wednesday's trading session, there is a chance that the market could retest the 200-Day EMA just below the $22 level. This area could attract many buyers, but it should be noted that there was a significant sell-off just above that level. Any upward movement would likely be slow and gradual. Because of this, you must be very patient with trying to hit a target, and therefore must look at it through more of a longer-term prism.
It's also important to keep in mind that silver is not just a precious metal, but also an industrial one. If the global economy slows down, this could limit price increases for silver. The silver market continues to be very noisy, and therefore you need to be cautious with your position size, which is typical for this market as a lot of retail traders lose a lot of money rather quickly. Keep in mind that although people are using it to preserve wealth now, it’s also worth noting that it has a high correlation to what happens with gold, so you will need to keep an eye on that market as well. The lower the leverage in this market, the better off you will probably be as it will mitigate some of the danger.
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