Silver markets opened Tuesday’s trading session with a gap to the downside as volatility remains high. In addition, we have several concerns regarding whether or not we will continue to have increasing momentum or whether we will need to pull back. I believe that a pullback makes some sense, but it does not always mean that the market must collapse.
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The fact that silver is not only a precious metal but also an industrial metal makes its market particularly interesting. In this environment, there are numerous factors that influence its movement, therefore you must be cautious about the size of your position as things can change pretty swiftly. In light of this, I am viewing the situation through the lens of $23 being a level of support, so I am expecting to catch a little bit of a bounce there, should we get one. If we don’t get there, I believe the 50-Day Exponential Moving Average becomes a potential support hurdle.
On the upside, I believe that the $24 level continues to be difficult to surpass, so it will need a substantial amount of momentum to turn this market around and remove that level, especially to reach the $25 level, which I do not believe will occur easy. In light of this, I believe this retreat should be viewed as a potential purchasing opportunity; hence, I’m awaiting a bounce that provides us with the desired value.