Silver: Flirting with History Yet Speculatively Questionable
Silver is traversing around 49.0600 as of this writing with fast conditions prevailing as speculative storms remain active in the metals sector and record values are being challenged.
Yesterday’s trading in Silver touched the 49.5840 vicinity momentarily. The commodity is flirting with record levels achieved in 2011 and in 1980. Silver has not traded over 50.0000 in over 45 years. Nearly one month ago Silver was barely trading over 41.0000. A gain slightly under 20% in less than a month is quite an accomplishment.
However, before day traders begin piling into Silver if they have never pursued the metal before they should be aware of a couple of important facts. Silver’s mining production can be increased rather easily and there is far more of the metal known to geologists within the ground compared to other precious metals. In other words its supply while limited is nothing compared to gold, nor other precious metals.
The 50.0000 Milestone and Pushback
The ability of Silver to move upwards with velocity cannot be dispelled easily though. Traders who have been pursuing the upwards trend have likely profited handsomely if they have used adequate risk taking tactics. Yesterday’s high was achieved in direct correlation to speculative buying frenzy being seen across the board in many precious metals. The 50.0000 USD level in Silver is certainly a talking point that many commodity traders are trying to talk into existence.
Yet selling did start to hit when the 49.5000 ratios and above were traded yesterday and downwards price action in the short-term has remained rather strong this morning. The 49.0000 level is now much closer than the 50.0000 ratio. Profit taking is likely coming into the marketplace, particularly if traders are happy with their winnings achieved the past handful of weeks, but that could change fast too.
Price Velocity and Speculative Wagering
Certainly traders looking for the ability to make fast profits will be tempted by the existing velocity in the Silver market. However, Silver has always been a dangerous commodity to speculate on because of its tendency to produce wicked reversals.
- Over exuberance feels as if it has taken place in the Silver markets.
- Day traders who are considering selling the commodity around the current apex levels have to be equally cautious regarding their wagers.
- Stepping in front of strong buying trends can lead to a great loss of money.
- If Silver suddenly starts to challenge the 49.5000 level again in the near-term and sustains values, then this might be a signal another leg up is possible, one that is intent on targeting the 50.0000 mark.
- If Silver suddenly starts touching the 48.9500 to 48.8000 ratios, some fearless bullish buyers may attempt to step in and look for higher altitudes also.
- How high can Silver go? And how shocking would a reversal lower be if the buying stops?
Silver Short-Term Outlook:
Current Resistance: 49.2100
Current Support: 48.9700
High Target: 50.4000
Low Target: 47.0010
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