Silver markets have gone back and forth during the course of the trading session on Friday after initially gapping lower, and now it looks as if we are trying to digest the gains and figure out where to go next. This not a huge surprise, considering just how explosive silver was during the previous session. That being said, the market is likely to be very choppy in the short term, but that is not overly surprising considering that silver tends to be very erratic.
SILVER Video 02.08.21
There is an argument between whether or not we are going to follow the US dollar, as it has such a huge negative correlation, or are we going to follow the industrial demand going forward? Looking at this chart, you can see that there is a lot of noise just above, especially near the $26.50 level. We also have the 50 day EMA sitting in that general vicinity, which of course is an indicator that a lot of technical traders will pay close attention to. If we break above there, then the $27 level will be targeted, followed by the $28 level as it would fill a gap that had formed back in June. At that point, I think there is a significant amount of resistance it could come into the picture in and cause problems.
To the downside, it is very likely that the market could go looking towards the previous uptrend line, assuming that it can even break down below the $25 level. All things been equal, this is a market that is going to be very noisy and choppy, but looking at this chart, it is obvious that we are trying to form a little bit of a base.
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