The silver market has seen a lot of noisy trading on Monday, as the headlines continue to move markets, via the interest rate markets in the US and beyond.
Silver
The silver market has been very noisy during the trading session on Monday as we continue to hang around the crucial $80 level. The interest rates in America of course have a major influence on what happens next, and they have been somewhat noisy as we initially gapped higher with interest rates at the open, driving silver to gap lower.
At this point, we continue to see a lot of back and forth sitting right here at the $80 level, which I think will end up being a bit of a magnet for price. The 50-day EMA sits just below there, and that I think is an opportunity to start buying on dips. If we break down below the 50-day EMA, then it could open up the possibility of a move down to the $72 level.
Geopolitical Wildcards and Supply Dynamics
On the upside, if we can break above the $83 level, then I think ultimately this is a market that, given enough time, probably goes looking to the $90 level. I do think that happens eventually, but we need higher interest rates to finally be a thing of the past.
A lot of this comes down to the headlines coming out of the Middle East, and that is the wildcard that is very difficult to price here. Regardless, eventually we will go back to the supply and demand equation, which does favor silver longer term. So now the question is: will we get an opportunity to buy pullbacks going forward? I think that is probably the case. I don't have any interest in shorting silver, at least not at the moment.