Silver rallied on Thursday, as we continue to determine whether or not the market still has any bullish momentum.
Silver
Silver rallied a little bit in the early part of the trading session on Thursday as we continue to hang around the crucial $60 level. The $60 level obviously is a large, round, psychologically significant figure and an area a lot of people will be paying close attention to. After all, the $60 level has been an area that we have fought over multiple times in the past.
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That being said, I think one of the truly big problems that we have at the moment is that there is a significant amount of upward pressure on interest rates in general, and that causes interest rate fatigue for silver. After all, it's a non-yielding asset, and that is one of the biggest problems you can have for a market like this. That being said, it is also worth noting that the US dollar continues to strengthen, and that obviously works against the value of something that's priced in US dollars like silver.
Macro Headwinds and Downside Target Levels
So, all things being equal, I think we have a situation where rallies are to be looked at with a little bit of suspicion, and I'm looking at signs of exhaustion as potential selling opportunities. If we were to break down below the $57 level, that very well could be a nice opportunity for short sellers to come in and push silver below the $55 level, perhaps targeting $50.
Now, having said that, if we do see a bit of upward momentum, the 200-day EMA, I think, is probably your first target. In that environment, you've got a situation where traders are looking to take advantage of any type of momentum, maybe US dollar weakness, possibly even push it towards the $70 level. But right now, it just looks like a very heavy market.
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