Silver continues to see downward pressure on Friday, as we are looking at this market through the prism of a potential end of inflation in the USA.
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Silver has fallen during the trading session on Friday in what would have been a holiday session as Juneteenth in the United States sucked away all the liquidity, shortened the day, and all of that. That being said, what I'm interested in the silver market right now is the fact that interest rates are dropping and silver is as well.
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This tells me that perhaps the markets are betting on lower inflation going forward. That is a predicament for those who have been trading the interest rate markets and the interest rate correlation that we have with precious metals. I think at this point in time, you have to recognize that the market is changing its attitude.
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Now, longer term, I do think silver strengthens, but it's not for the same reason. It's not the fact that inflation's coming, it's that there isn't enough supply for the demand.
The $60 level right now, I believe, ends up being a floor in the market. If we were to break down below there, then it's likely we go to $50. Silver is a very finicky market; it's one you have to be very cautious with.
I look at it right now, at least as a short-term rallies are to be sold into. I'm not negative on silver in the long term, but I recognize that as the market starts to find itself in a state of fluctuation, then we have to figure out where the big money's going. Right now, it looks less interested than it once was, so keep that in mind. A range between $60 on the bottom and $70 on the top, I think, makes a lot of sense at this point.
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