The silver market sees a bit of consolidation at the moment, as we are looking at the possibility of peace in the Middle East, allowing interest rates to drop.
Silver
The silver market was very noisy during the trading session on Wednesday, as we are just hanging around the $70 level. The $70 level, of course, is a large, round, psychologically significant figure.
The silver market is currently sitting between the 200-day EMA below and the 50-day EMA above. With this, I think you've got a scenario where traders really, at this point, are just trying to determine whether or not risk appetite is going to continue or expand.
It's also worth noting that the last couple of trading sessions have been working off the froth from the end of last week, when we started talking about the memorandum of understanding being signed between the United States and Iran. Really, at this point in time, I think you've got a scenario where we could see a fragile peace. But what is probably more telling is the fact that it's likely that it would take very little to kick things off again.
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Interest Rates and Market Correlation
If rates continue to fall, and they have been for a while, it looks like the silver market is reacting positively to falling rates. That is the typical correlation that you see: lower rates, higher silver.
So, pay attention to that, but I think probably just a little exhausted at the moment. Short-term pullbacks, I think, get bought into. I'd be willing to buy it as long as we stay above $60. I think the overall sideways action over the last several months really, I think, remains the way forward.
All things being equal, the market is likely to continue to attract plenty of value hunters, but as things stand right now, we just haven't had the opportunity to pick up cheap silver. I'll be watching very closely. If we break to the upside, the 50-day EMA is probably your next stop as far as the buyers are concerned, where they would reevaluate things.
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