[ad_1]
Despite its industrial flavor, silver tends to follow gold over the longer term. Gold has been taking off to the upside, and if it continues to do so, silver will likely follow.
- The silver market has been experiencing a lot of noise lately, with rallies and dips occurring frequently.
- The 50-Day EMA and the 200-Day EMA sit just below current trading, indicating that there may be a significant amount of support for the market just underneath.
- However, silver is known to be an extremely volatile instrument, so it is not surprising to see choppy behavior.
Despite its industrial flavor, silver tends to follow gold over the longer term. Gold has been taking off to the upside, and if it continues to do so, silver will likely follow. However, due to the current state of the global economy, it is likely that silver will be a bit of a laggard.
Breaking down below the $21.50 level opens a move down to the $21 level, and possibly even further down to the $20 level. If this happens, it is expected that the US dollar will strengthen, as the silver market is highly sensitive to US dollar strength or weakness. Therefore, it is important to pay close attention to the US Dollar Index, as the correlation is well known. As the dollar rises, silver is one of the first commodities to get hammered under normal circumstances.
Traders should be cautious with their position sizing, especially with the upcoming Federal Reserve announcement next week regarding interest rates. This announcement could have a major influence on what happens next with the US dollar, and then by extension, the silver market. It may be better to go long on gold instead of silver if you plan on buying precious metals.
Even if the silver market breaks out to the upside, the $24.50 level above has been a major resistance level. Therefore, it is likely that the upside will be somewhat limited, even if a breakout occurs over the next few sessions.
Ultimately, the silver market has been experiencing a lot of noise and choppy behavior. It is important to pay close attention to the US Dollar Index and the upcoming Federal Reserve announcement regarding interest rates. If you plan on buying precious metals, it may be better to go long on gold instead of silver, as silver looks like it will continue to underperform. The $24.50 level above has been a major resistance level for silver, so even if a breakout occurs, the upside may be limited.
Ready to trade our daily Forex analysis? We’ve made a list of the best Forex brokers worth trading with.
[ad_2]