(MENAFN- Daily Forex)

• The silver market initially tried to rally during the trading session on Thursday but continued to see the $39 level as a bit difficult to overcome.
• This is an area that's been resistant a couple of times recently, so it's not a huge surprise to see that the market pull back from there.
• However, the PPI numbers came out at 0.9% month over month instead of the expected 0.2% month over month were certainly going to be a major influence on risk appetite in the financial markets, and silver is very sensitive to external factors that can be quite volatile.

Recent Price Action

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The recent price action in the silver market suggests that the $39 level is going to be difficult to break above, and if we can clear that area, then it's possible that we could go looking at the $40 level above. The $40 level will end up being a difficult place to get too, but perhaps even more difficult to get above. If we were to break above the $40 level, then I think you've got a situation where silver will really start to take off. However, recently we have seen the exact opposite, as we are just simply going back and forth between $39 on the top, with the $37.50 level underneath offering support. The 50 Day EMA has been rising for some time, as it is hovering around the $37.10 region.

Of course, Silver has quite a bit of sensitivity when it comes to interest rates, and of course the US dollar. Ultimately, this is a market that I think remains fairly strong but traders are still having to deal with the fact that we don't really know what the Federal Reserve is going to do, and we are starting to hear murmurs from the Federal Reserve, this time in the form of Gov Musalem, that a“half point cut is not supported by the state of the economy, or the data.” This is what the market is clamoring for, so it'll be interesting to see how it reacts from here. We have certainly seen a lot of volatility come into the market after he said that during an interview.

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