Silver Continues to Look Strong

NEW YORK (October 13) The silver market has rallied a bit during the trading session here on Monday in the early hours, gaining over 5% as we raced towards the $50 level in the futures market. Spot prices are going to be a little bit different, and we have seen some backwardation, meaning that futures traders believe that silver is actually dropping in value down the road, not rising. I don’t know if that actually ends up being the case, but it is something to keep an eye on. Backwardation can be a bad sign.

That being said, the trend is very strong. It’s very difficult to argue with it at this point and therefore short term dips, at least in the meantime, have to be looked at as potential buying opportunities, with the $48 level offering support, the $47 level offering support and then again, the $46 level offering support. Ultimately, I think this is a market that’s been very strong for some time as you very well know.

And now that we have US–Chinese relations kind of cooling off a bit, and not as aggressive towards each other as they were on Friday, you’ll see people trying to buy silver to bet on more economic growth. We’ll just have to wait and see if that ends up being the play going forward. But I recognize at this point in time it’s almost impossible to short this market. A little bit of a pullback? Yes. I think that makes perfect sense. But some type of trend change? No, not at the moment.

FXEmpire