Silver Price Forecast – Silver Has Volatile Open for the Week
NEW YORK (October 9) Silver of course has been very noisy to kick off the trading week as precious metals markets reacted to the Hamas invasion of Israel. With that being said, the market gapped to the upside right away, shot higher, but as the Americans are coming on board in the futures markets are starting to liven up a bit, we have seen a complete repudiation of that move. I suspect this probably will have more to do with the US dollar than anything else, although it’s obvious that silver had been oversold. A little bit of a bounce from the $21 level probably was reasonable to expect, and now that we have seen this candlestick, you have to wonder whether or not we are going to consolidate, or if we are going to go higher?
Keep in mind that silver is highly sensitive to the US dollar, and then by extension to interest rates. Because of this, you have to look at this through the prism of a market that is going to continue to move quite wildly, which is a scenario where silver becomes especially dangerous, because it is so volatile and expensive to begin with. If you are trading the futures contract, you could find yourself in serious trouble rather quickly, as silver is known for its volatility, and of course it’s a very big contract. If you are trading the CFD market, then you can position size accordingly, but I would not get overly exposed due to the fact that there are a lot of problems just waiting to happen.
Underneath, we have the $21 level offering a significant amount of support, and if we were to break down below there, that could open up the bottom in the market, allowing it to go to the $20 level rather quickly. On the upside, I see the $22.33 level as offering significant resistance, and then again at the $22.50 level. We recently had the so-called “death cross” that a lot of people pay close attention to, so that would be worth paying attention to as well, as it could cause a few headaches as technical traders get involved.
FXEmpire
