(MENAFN- Daily Forex) Silver markets initially tried to rally on Tuesday but got absolutely slammed after Jerome Powell suggested that inflation is no longer considered to be“transitory.” Because of this, the US dollar spiked in value, which drove down the value of precious metals overall. Silver was especially hard-hit, but that should not be a surprise considering how volatile the market is. At this point, if we break down below the lows of the trading session, it is very likely that silver will go looking towards the $22.50 level, perhaps down to the $21.50 level.
Advertisement See for yourself why silver is such a popular commodity! TRADE SILVER NOW
Silver has been selling off for a while now, so none of this should be particularly surprising, but I also recognize that we have been selling off for quite some time, so the question now is whether or not we have enough momentum to continue going lower. Short-term rallies at this point in time continue to get sold into, but if we were to break above the top of the last couple of trading sessions, we could have a significant bounce. I do not necessarily think that silver will take off, despite the fact that a lot of retail traders believe that silver is a hedge against inflation, because quite frankly rising yields offer a much more attractive situation than silver does, because there is a cost of storing silver.
Furthermore, JP Morgan and several other banks have been busted multiple times over the last several years manipulating the price of silver much lower. It sounds a bit cynical, but all one has to do is a simple Google search to find out how many times they have been busted, and how little it has cost them. Because of this, silver is a different market in the sense that you can think of it as a market that has someone's thumb pressed against it, suggesting that there could be trouble breaking out for a significant move. In that scenario, you have to look at the market through the prism of where it has been allowed to go, meaning $28. That to me is the absolutely massive“ceiling in the market”, but I do not see us getting anywhere near there anytime soon. In fact, this remains a market that you sell rallies on, or perhaps sell if we break down below the $22.50 level, as it is the next support level.
MENAFN01122021000131011023ID1103285225
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.