Silver markets gapped higher to kick off the trading session on Monday, showing signs of strength again. Ultimately, this is a market that has been bullish for some time so I am not surprised at all to see that we might see some strength here. Short-term pullback should be buying opportunities, as silver has been so strong over the last several months. The fact that we are grinding sideways with a slightly upward twist suggest that we are going to continue to go higher. All things being equal, the $26 level underneath should be supported, just as the 50 day EMA is starting to reach towards the $25 level underneath there.
SILVER Video 08.09.20
Looking at this chart, it is obvious that the $30 level above is a major resistance barrier, so it is very likely that we will see the market struggle to get above there. However, we do break above the $30 level it is likely that the market goes much, much higher. I think Federal Reserve monetary policy will continue to drive silver higher over the longer term, but we may have some choppiness to deal with in the short term. If we break down below the $24 level, that could suggest significant selling pressure, perhaps reaching down towards the 200 day EMA which is closer to the $20 level. With this, it is only a matter of time before buyers return in theory, so therefore I look at this as a potential “buy on the dips” type of scenario, just as it has been for some time.
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This article was originally posted on FX Empire
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