Silver markets have had a very explosive move to the upside over the last week, as we continue to see plenty of bullish pressure. That being said, it will be interesting to see whether or not we can keep it up, due to the fact that we are approaching a major resistance barrier in the form of about $25 or so. Keep in mind that a lot of big banks have paper short sign, suppressing the price in the futures market, which is sometimes why you get major divergence between futures prices and physical prices. Essentially, it is a highly manipulated market and therefore silver has a hard time taking off for a bigger move on longer-term charts. In fact, I would be willing to say that even if we break out above this resistance area, it will take nothing short of a minor miracle to make silver go above $30.
SILVER Video 24.01.22
This is not to say that you should be shorting this market, it is just saying that there are definite boundaries as to the kind of losses some of these banks are willing to put up with. Quite frankly, when you have more paper short then you have supply in the world, there is something going on. They have all been fined for it multiple times, but quite frankly it is more profitable to just simply pay the fine as a “cost of doing business.” With that in mind, I look at this more or less as a range bound market between $22 and $25, so you need to keep that in mind if you are going to try to trade from a longer-term standpoint. The market continues to be one that will be erratic, and you will have to pay attention to the US dollar as it has a huge negative correlation.
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This article was originally posted on FX Empire