The silver market continues to see a lot of noisy behavior, as interest rates have been suppressing prices recently.
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The silver market has rallied rather significantly during the trading session on Friday, bouncing from below the psychologically important $60 level. At this point, part of the story is going to be technical. The other part will have to do with bond markets calming down a little bit and the ability for rates to drift a little bit lower.
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We'll have to wait and see whether or not that continues, but that has been the story for some time now: a simple matter of lower rates, higher silver, and, of course, vice versa.
Whether or not that remains, we'll just have to wait and see
With that, I think you have to look at this market as one that will remain very noisy, but one that is, so far at least, respecting the area between $60 and $55 as major support.
Whether or not that remains, we'll just have to wait and see. Right now, the market is definitely one that is watching headlines around the world, as concerns about energy supply continue to cause energy inflation, which causes higher rates.
There are also fiscal concerns, but if it were just that—thinking France, for example—silver, and more specifically gold, would probably be doing better in that environment.
With that being the case, and the fact that it's Friday, it's also possible that we're just seeing some simple short covering as traders don't want to have a position as they headed into the weekend. While this is a good look so far on Friday, it's not trend-changing; it's not trend-defining. I think it's a factor of bonds easing a little bit over the last couple of days and, quite frankly, people not wanting to be caught short at the open in early Monday morning trading in Asia.
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