The silver markets gapped higher to kick off the trading session on Tuesday to show signs of strength again, but then we turned around to fall below the $28 level. The $28 level of course is a large, round, psychologically significant figure, and an area that has offered significant resistance in the past. However, we have sliced through a couple of different times and it looks like the buyers will probably come back in to try to push to the upside.
SILVER Video 24.02.21
The overall attitude of the market has been bullish as the “reflation trade” continues to be a major driver of silver. Silver of course is an industrial metal, and the idea is that if we are going to see massive amounts of stimulus coming out then it should drive up the demand for industrial metals overall. The $30 level above is a major resistance barrier, and if we were to break above it, that opens up the possibility of a move to the $50 level. We have seen that happen a couple of different times, and therefore I anticipate that history will repeat itself.
That being said, it is going to take a lot to get silver above that barrier, and we can see clearly over the last couple of weeks just how much trouble there could be. To the downside, I believe that the 50 day EMA is going to continue to offer plenty of support, as it has been rather influential over the last couple of months. This coincides with the $26 level just below there, which of course has been structural support and resistance previously. Pay close attention to the US dollar, because if it starts to strengthen that could be trouble for silver.
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