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MENAFN- Daily Forex)
- Unfortunately, most retail traders look at silver and gold through the same lens, but the recent price action is a good example of why that is not necessarily the case. As I look at the silver market right now, we are struggling a bit, but, at the same time, gold has broken above a significant resistance barrier. Because of this, the market is likely to continue to see a bit of a potential“pairs trade”, buying gold and shorting silver. Currently, silver is in a bit of a pickle.
Technical Analysis
The technical analysis for this pair is essentially sideways in the short term, but there are a lot of different things working against the price of silver right now. Therefore, you need to be cautious about buying in this market. That being said, the market is likely to continue to see a lot of questions asked of the $31 level above, which could of course be a major resistance barrier as it has been important a couple of times now. If we can break above the $31 level, the market is likely to continue to see buyers jump into the market, perhaps reaching the $32.35 level.
If we do break down from here, the market is likely going to look at the 50 Day EMA as a support level, and then of course after that, we have the $30 level offering a significant amount of support also. After that, then we have the 200 Day EMA, followed by the $28.75 level. This is an area where we have seen a little bit of a“double bottom” coming into the picture, so if we were to break down below that level, then I think silver really starts to fall apart.
All things being equal, the silver market is one that is heavily influenced by interest rates, and of course the stronger US dollar. Both of those are working against silver at the moment, so I think you've got a situation where we continue to see silver lag gold.
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