Silver Breaks Out on Friday

NEW YORK (February 14) Silver has broken significantly during the Friday session to the upside as it looks like we continue to see a lot of pressure. The $32.35 level of course has been a massive barrier and ultimately the market is likely to continue to see a lot of upward pressure. Short-term pullbacks will certainly attract attention now that we have broken out and pretty much everybody has noticed it.

And silver is now outperforming gold, at least in the short term, which is interesting. But having said that, I think you’ve got a situation where you have to be very cautious because silver can rip in one direction or the other quite viciously when you are not paying attention.

So, position sizing and risk management is paramount in this market. Nonetheless, this breakout is a simple continuation of the longer term uptrend that we have been in. And we of course will have to pay attention to any correlation with the US dollar as it can have a major influence on where we go from here. I don’t like the idea of shorting silver, although when I do short precious metals, silver is the first one I do it with.

But at this point in time, I think you’ve got a buy on the dip move, probably going all the way up to about $35 where we will face a massive challenge. We already have given back quite a bit of the gains for the day, but I think part of this is probably the fact that we hit a pocket of air on the chart.

FXEmpire