Silver dropped hard to start the week on Monday, as interest rates move and war weighed upon it. However, a social media post from Trump about talking to the Iranians has sent things higher for the time being.
SILVER
Silver plunged initially during trading on Monday but has bounced from the crucial 200-day EMA to show signs of life again as traders are trying to sort out whether or not risk appetite will return. The morning was abruptly set into overdrive as Donald Trump suggested that the Iranians and the Americans had been talking and this of course had more risk behavior jump back into the market.
Technical Support and Geopolitical Volatility
But ultimately, we have to ask questions as to whether or not the silver market is broken. After all we had just sliced through a massive amount of support and important floor in the form of $70. At this point if we do break to the upside, it's possible that we could go looking toward the $80 level, but I think the $80 level is an area that will be very difficult to break above.
All things being equal, this is a market that I believe is that we continue to see selling opportunities on signs of exhaustion. If the market were to break above the $80 level that could change some things but right now, I also believe that we have a market that quite frankly just has too much in the way of uncertainty to pile into something like silver.
Silver of course is typically very volatile under the best of circumstances and quite frankly these are not the best of circumstances as the interest rates in America had been climbing and of course, we had seen a lot of questions asked about whether or not traders are going to continue to see the idea of artificial intelligence demanding much more silver going forward.
With that being said the market is likely to be very noisy and very volatile but I still think there is a huge amount of overhang in this market that simply is going to be too much to overcome. While we did form a nice hammer you have to understand that in this context it probably just ends up being a bit of a dead cat bounce.