Silver Continues to Grind Away

NEW YORK (January 29) Silver rallied fairly significantly during the trading session on Monday as traders came back from the weekend. That being said, we should also pay attention to the fact that the $23 level is important because it is a large round figure, but at this point, it looks like we are ready to go looking to the $23.50 level. Also, I think short-term pullbacks at this point in time will continue to see buying opportunities.

And I do think, at this point, we can also look at the $22 level as a significant floor in the market. After all, $22 has been a significant barrier for support going back multiple years, even though the market did dip through there at one point last year. That being said, if we do continue to rise from here, eventually we will have to deal with the $24.50 level.

And if we can break above there, then $26 above is where I think there is a significant barrier that really is difficult to overcome. If we do break above there, that would obviously be huge, but the market right now, I think is just trying to, at the very least, get to equilibrium, which is right in the middle of the larger $22 to $26 consolidation phase. Silver, of course, will be sensitive to interest rates in the United States, the US dollar, and of course, industrial demand. So, keep all of that in the back of your mind as well.

Always keep your position size reasonable as the silver market is extraordinarily volatile and can get you into trouble quite rapidly. Furthermore, you have to keep in mind that the FOMC meeting this week will have a major influence on what happens in the interest-rate markets, which has a direct correlation to what will happen in the silver market. Caution is the better part of valor but it certainly looks as if we are closer to support than we are to resistance.

FXEmpire