Silver Forecast 21/01: Will $100 Be The Next Target? (Video)

(MENAFN- Daily Forex) The silver market has rallied quite nicely during the trading session, as momentum continues to outpace everything else.

• The silver market has rallied quite nicely during the trading session on Tuesday as the US dollar has taken it a bit on the chin.
• That being said, I also think this is a situation where traders are going to continue to look at this as a market where short-term pullbacks, more likely than not, will continue to bring in a lot of buying pressure.

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With this being said, I like the idea of looking at the $90 level as your short-term floor. I do recognize that this is getting a little bit of a boost for the day based on US dollar weakness. That being said, it has also rallied on several days when the US dollar took off. Lack of physical supply of course remains the challenge here, and it's worth noting that we did test the $95 level during the Tuesday session.

I think short-term pullbacks probably end up being the opportunity to build up enough momentum to finally smash through $95 and go looking to $100 an ounce.A Continued Short Squeeze

The $100 an ounce area is going to be an area that I think a lot of people pay close attention to, but at the end of the day, it's just a psychological figure. The market is overbought, but it's been overbought for about 3 months now. So, with that being said, you have to recognize you're still in the middle of a short squeeze and therefore there is no real way to short this market safely at this point.

Really, at this juncture, you'd have to see silver break down below $70 to even begin to have the conversation of whether or not it is falling apart. To put that into perspective, that $25 drop would put the market probably in a corrective phase, but it's worth noting it was just about a year ago that silver itself was only worth $25 an ounce. So that is just how out of control this market is at the moment.

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