Silver rose again on Friday, as we continue to see concerns about supply for the markets.
Silver
Silver has rallied quite nicely during the trading session on Friday to break out and slice through significant resistance. Because of this, I think the market is going to continue to see plenty of buyers on dips and it is probably only a matter of time before buyers find any type of drop as a potential buying opportunity based on value.
The $90 level continues to be an area of importance that I think a lot of people will be watching as it's a large round psychologically significant figure and an area that previously had been resistant. At this point, I do think it's probably only a matter of time before silver goes looking to the $100 level as it's the next large round psychologically significant figure and of course an area that captured a lot of attention in the past.
Support Levels and Supply Concerns
If we do break down from here, I see support not only at $90 but possibly at the $80 level as well, where the 50-day EMA currently sits. I have no interest whatsoever in trying to get too cute here and short the market on any pullback. I think waiting for a drop and a bounce continues to be the best way to go forward.
I do not wish to fight this trend and now we have another issue where the Mexican situation with all of the violence going on down there is getting a little bit of attention because Mexico of course is the number 1 exporter of silver and there are concerns about supply disruption. Ultimately, this is a market that I think goes towards the $100 level but do be aware of the fact that there are waves of volatility just waiting to happen here.