The silver market continues to see a lot of noisy trading on Monday, as we are looking like a market that will continue to move on the latest headlines, and, of course, the interest rate markets.
Silver
The silver market gapped pretty significantly to the downside on Monday, as we are continuing to see a lot of volatility and questions about the interest rate markets. The silver market, of course, is very sensitive to interest rates, and as interest rates jump, the silver market falls apart.
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But really, at this point, I think what we had seen initially was traders reacting to the negative headlines coming out of the Middle East, suspecting that we were going to see silver fall apart as rates jumped. We've since seen silver rally a bit in order to fill the gap, only to show signs of exhaustion.
This is a market that I think continues to be very volatile and choppy, but the $60 level underneath, I think, is a floor in the market at the moment. It should attract options traders as well.
Key Technical Levels and Indicators
The $70 level above is a significant resistance barrier. The 200-day EMA has offered a little bit of resistance, and I think ultimately this is a market that needs to make a longer-term decision, and really at this point in time, one has to question whether or not $60 will, in fact, hold.
If the $60 were to break down from there and go looking to the $50 level, you would probably see significant U.S. dollar strength in general.
If the market were to break above the $70 level, then the 50-day EMA would be targeted. Finally, after that, the $80 level, but you would more likely than not need to see a lot of U.S. dollar weakness to make that happen.
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