Key Takeaways
- The silver market pulled back towards $27.70 but showed signs of life again
- Breaking above $28.50 level would be a victory for buyers
- Market remains choppy and noisy, awaiting a bigger decision
- 50% Fibonacci retracement level at $27.30 provides significant support
- Industrial demand and US dollar movements will influence silver prices
- Market likely to drift higher with lack of economic news
- Trading position should be relatively small due to high volatility
Silver Markets Technical Analysis
The silver market initially pulled back towards the $27.70 level, only to turn around and show signs of life again. During the early hours on Monday, the $28.50 level above is important, and if we can get above there, it would be a victory for the buyers. Anything above there then starts to ask questions of the $30 level, which is where we had pulled back from previously. In general, this is a market that remains very choppy and noisy, and it is probably only a matter of time before we have to make a bigger decision. When that comes, we will see a lot of massive inflows into the market in whichever direction we choose.
It is worth noting that the 50% Fibonacci retracement level, which sits on the $27.30 level, also features the 200-day EMA. So, there is a significant amount of support underneath. Whether or not we can go higher will have a lot to do with industrial demand and what people do with the US dollar. With a serious lack of economic news during the day on Monday, the market probably has a proclivity to drift a little higher as traders don’t have anything to worry about for the next five minutes. Silver, being very volatile, will likely increase that volatility in line with the stock markets. It is advisable to ensure that trading positions are relatively small.