- Silver has been very active in the early hours on Tuesday, and with that being the case, the pullback is something to pay attention to.
As you can see, we slightly corrected to keep the 50-day EMA as our support. We are also testing the 200-day EMA as I write this, which will undoubtedly get a lot of attention. A notable obstacle is present above in the amount of $23.50.
Thereafter, $24.50 and finally $26 come next. Looking at silver's performance over the past few years, the market has placed a lot of attention in the $22–$26 range. We have occasionally ventured outside of this region, but overall, we have remained close by.
Given that central banks all over the world will be relaxing monetary policy this year, I believe the market is still one where it makes sense to "buy on the dip." Additionally, you should keep a watchful eye on the US dollar, which has somewhat declined during the trading session, which also benefits silver. I believe that if we can break above $23.50, more investors will be adding to their positions in an attempt to move the market up to that critical $24.50 level.
Buying chances arise from short-term pullbacks, and I believe the $22 level below is your hard floor in the market. You can even see that we have developed something of a W pattern over the last, say, six weeks or so. This pattern in and of itself will get a lot of attention since it is a generally recognized technical pattern. Also worth considering is the 10-year yield in the United States. If it begins to fall, that will contain silver and, naturally, gold, which silver will frequently follow on its own. But don't forget that industrial demand has a role in the market as well. For this reason, silver can occasionally be somewhat more volatile than gold.
Silver is likely to benefit from central banks and their actions overall this year. However, you will need to be careful in general, but the reality is that silver is an expensive contract if you are trading futures, so I still prefer CFD markets as you can tailor your size as necessary.
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