Silver markets initially dipped on Monday but found enough support below near the 50-day EMA to send the market back to the upside. By doing so, the market looks as if it is trying to figure out where to go next, as we are currently stuck between two of the biggest technical indicators that people follow. The 50-day EMA is just below, but we also have the 200-day EMA near the $24.54 level. The $25 level is above there, and that offers a significant amount of psychological resistance.
Silver has a little bit of a different attitude to it than gold does, so I do think that it has a better shot at going higher. After all, the silver market is highly sensitive to industrial demand, something that should be picking up as we reopen. At this juncture, I do believe that the market is likely to continue seeing a lot of noisy behavior, as we are trying to figure out whether or not the economy is going to rip higher, or if it is going to struggle. You can also make an argument that we had broken above a significant downtrend line, so a certain amount of technical trading will probably point to the upside as well.
All of that being said, the $25 level will be key for the longer-term trader. If we can break above the $25 level, then I think it gives this market a real opportunity to start accelerating for more of a “buy-and-hold” scenario. I do not see that happening easily or soon. Nonetheless, I do think that there are a significant amount of buyers below, probably all the way down to the $23 level. It is when we break down below $23 that I would become more concerned about this market, but right now I do not think that is the likeliest of scenarios. If we did break down below there, it would more than likely show the US dollar strengthening, while there would be a massive dumping of silver at that point. In the short term, I would anticipate bouncing around between the 50- and the 200-day EMA indicators, which is essentially what we have been doing for about three weeks.
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