The silver market has been a bit positive on Friday, as traders are waiting to see how the weekend plays out with the peace talks between the Iranians and Americans.
Silver
The silver market has rallied just a touch during the trading session on Friday as we continue to threaten the 50-day EMA. This market is going to be particularly interesting to watch because it is highly sensitive to interest rates and the 10-year yield in America is just above that 4.30% level that we have been watching so closely. This level continues to be one of the biggest ones for the entirety of the market.
I do think you need to be very cognizant of the fact that if rates spike, silver is probably going to find some problems. What I find particularly interesting is that as we head into the weekend, the meeting in Islamabad is probably the biggest single driver of where we go next.
Geopolitical Drivers and Potential Scenarios
Quite frankly, if the Americans and the Iranians can come to some type of deal they both can live with, that should be good for a lot of different things, silver included. Rates should at least in theory drop from there and then silver probably breaks above the 50-day EMA, I would even venture to say gaps above there, test $80 and maybe even blows through there to go looking towards the $82 level.
Short-term pullbacks are very possible and probably buying opportunities, but you should also keep in mind that there could be negative consequences because of this meeting. We could gap lower. If that is the case, watch the $70 level and then after that watch the 200-day EMA. This is going to be an extraordinarily dangerous market so make sure you size your positions appropriately. Big positions can only bring trouble in this kind of trading environment.