Silver Forecast: Continues to See Volatility

• Silver has fallen initially during the early hours on Tuesday, but it looks like the 50-Day EMA is going to continue to come into the picture and offer signs of support.
• Ultimately, this is a market that I think has plenty of support below there, so I’m not necessarily looking to start shorting silver, quite the opposite, I’m looking for a buying opportunity.

Earlier in the session on Tuesday, we had seen a little bit of hope when it comes to silver, but it looks like we are still trying to do everything we can to finding some type of support that we can hang onto, and I do think that eventually this market could find it. If we break down below the 50-Day EMA, then the $28.50 level is an area that I think a lot of people would be paying close attention to. Not only has it been support in the past, but it’s also been resistance, making it an area that we would see a lot of “market memory” at. Breaking down below that level would change quite a bit I think, especially if it is on the daily close.

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Silver is sensitive

Silver is very sensitive to a lot of different things, and therefore it is a much more volatile contract than many others. It is because of this that I know quite a few retail traders that have been wiped out by this market. Quite frankly, it’s not necessarily the smartest market for retail traders to get involved in, because it is sensitive to so many different things. Unless you understand various markets, you have no business trading this one.

Silver is very sensitive to interest rates, and that of course is something that most retail traders don’t even think about. Interest rates drive almost everything, and silver is no different. Silver is also highly sensitive to industrial demand, and it’s not as much of a precious metal is a lot of people like to pretend it is. It is not gold, and therefore it doesn’t necessarily behave the same way, although it’s worth saying that over the longer term they do generally move in the same direction. That’s where most people make the mistake.

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