- Silver extended its rally as momentum, retail participation, and rate-cut expectations drive prices higher.
- Despite supply arguments and speculative narratives, strength remains intact, with pullbacks favored and upside targets still in play.
During the trading session on Monday, silver rallied again as this market continues to be one of the better performers. The perceived short squeeze continues to be a major driver here. A lot of this comes down to simple momentum. Central banks around the world, possibly cutting interest rates, also have a major influence on silver and where it is going to go next. At the end of the day, a lot of this is perhaps driven by retail trading.
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Whether or not that ends up being a good or a bad thing remains to be seen. But the big argument now is that there is a serious lack of supply. To be honest, there has been a lack of supply for at least 20 years. It is unclear what the difference is now compared to five years ago, but one thing is for sure: the momentum is a lot different.
Momentum, Speculation, and Key Price Levels
There is the possibility that the whole speculative AI boom had something to do with it because, in theory, there will be massive demand for silver as a commodity used in technology. At this point in time, although that might be part of the situation, it is more or less an excuse. Quite frankly, there would be more interest in buying copper, but that is a completely different situation.
Short-term pullbacks at this point in time should continue to be buying opportunities in an extraordinarily strong market. This market does not appear likely to fail anytime soon, and the $60 level opens up the possibility of a short-term floor. If the market can break above the $65 level, then $67 would more likely than not be the next target.
The one thing that is known about this market is that it is not one to get short of, at least not anytime soon.
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