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Silver markets initially pulled back during the course of the trading session on Thursday, reaching down towards the $27.50 level before turning around to show signs of life again. By bouncing the way, we have, the market has ended up forming a bit of a hammer, which of course is a very bullish sign. Looking at this chart, it is obvious that the buyers are very aggressive on dips, and therefore I think it is almost impossible to short this market, as there is a lot of interest in this market as we have seen every time it drops. The 50 day EMA also offers plenty of support, so I think that we are getting close to some type of squeeze.
SILVER Video 11.06.21
Keep in mind that industrial demand for the metal will pick up due to industrial demand based upon what we are seen recently, so I think that we still continue to press higher, but we also recognize that the area between $28 and $30 has offered a lot of resistance as of late. With that in mind, I like the idea of buying short-term dips, but I would not look for much more than that considering that the markets have been so tight as of late.
If we were to break down below the 50 day EMA, then it is possible that we could drop down to the $26 level, but at that point there would also be the 200 day EMA, and of course the uptrend line from the ascending triangle. With that being said, this is a market that I think continues to see upward pressure overall.
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This article was originally posted on FX Empire