- The silver market continues to see a lot of volatility, as the Monday session initially with positive, cat slammed and then bounced again.
- We are still in the circus that is the tariff situation, which has now reared its head again as the White House has announced 25% tariffs against Japan and South Korea starting August 1 unless a deal gets signed.
This of course cause the market to lose its mind, which continues to be a major problem in the markets as the volatility is driven by external factors, not necessarily by anything along the lines of normal fundamentals. With that being said, it has the US dollar all over the place, the bond markets all over the place, and therefore everything else followed suit.
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Technical Analysis
The technical analysis for silver is bullish over the longer term, but over the last several weeks, we have seen a lot of back and forth trading, as traders just simply don’t know what to do with the global risk appetite situation, and of course what’s going on with the US dollar in any given moment. Keep in mind that the silver market also features an asset that is highly sensitive to industrial demand as well, so if the industrial man gets sapped due to further tariffs, then we could see negativity here as well. It’s really hard to tell, because silver is not necessarily a safety metal, but it does tend to follow gold over the longer term.
Going back to the technical analysis, it appears that we have been consolidating between the $35 level in the bottom, and the $37.50 level on the top. If we can break out above the $37.50 level, then I think the market really starts to take off to the upside. On the other hand, if we were to break down below the $35 level, then we would not only be below the support level, but also the crucial 50 Day EMA, which attracts a lot of attention. Either way, I think it remains more or less a “buy on the dips” scenario over the longer term.
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