Silver Continues to Launch Higher

LONDON (September 23) Silver has initially pulled back just a bit during the early hours on Tuesday, only to turn around and show signs of strength yet again, as it looks like we are racing towards the $45 level. $45 is an area that I think will attract a lot of attention. And it is probably worth noting that the market obviously will be looking a little stretched at this point.

But at this juncture, I think we have to see this as a buy on the dip market as traders continue to fly to precious metals. The $42 level should be support and the floor, the absolute floor, I think, at the moment is the $40 level, not only due to the fact that it is a large, round, psychologically significant figure, but it is also a previous resistance level. So, it makes sense that market memory would come into play here.

The question at this point isn’t so much whether or not we can get to $45. We are already there. The question is, will we reach 50? With that being said, it is worth noting, historically speaking, the $50 level is a real problem to get through. Whether or not that remains this time as a massive barrier, we’ll just have to wait and see, but market memory would dictate that getting above 50 is going to take serious work. Right now, clearly, if it drops, you have to look at it as a gift and a bit of value in a massive bullish market.

FXEmpire