Silver markets fell a bit during the trading session on Thursday, reaching towards the $17.35 level by the time we got to midday in the United States. The silver markets were overbought, and as a result needed to have a little bit of selling come into play. That gives a little bit of relief to the massive pressure that has been building up in this market, and quite frankly has been overdone for a while. With that being the case, I anticipate that the markets will probably go looking towards the $17 level, the scene of a gap at the beginning of the week. If that holds, then we will see another attempt at the $18 level. However, if we close below there it could be a rather negative sign.
SILVER Video 22.05.20
While people will be paying attention to the 200 day EMA, the reality is that there is support just below there anyway so it would not be overly surprising to see the buyers come back in somewhere closer to the $16 level. That being said, when you get a gap higher like we have had at the open of the week and you break back down through it, that is not a good sign at all. Remember, silver also has an industrial component built into it that a lot of people pay attention to, so it is worth noting that potential headwind when it comes to silver. If you are playing for the precious metal side or as a hedge against central bank foolishness, then gold is still going to be the go to acid.
This article was originally posted on FX Empire
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