Silver Continues to See Noisy Trading as Rates Drop

NEW YORK (March 25) Silver gapped higher to kick off the trading session on Wednesday as reports are coming out that the United States and Iran are trying to work their way towards a ceasefire and talks. Ultimately, I think at this point in time you have to assume that the market is willing to jump higher on any hopes of a secession of hostilities in the Middle East as it will drive interest rates down around the world due to perhaps cooling inflation when it comes to energy. This is the hope that the markets are trying to price in at the moment.

Middle East Peace and Energy Inflation

Looking at this chart, I think you could see the silver market try to reach the $80 level, although I’d be the first to warn you that silver, of course, is very sensitive to interest rates. At this point in time, if the interest rates peak back up, perhaps due to headlines or something to that effect, you can expect silver to fall apart.

The 200-day EMA is support. We are back above the $70 level, which is a very strong victory, but the question now is, can we get past $80? I don’t know. I think that still remains to be seen, but in the short term, it certainly looks like we’ve got a little bit of upward momentum. Longer term I think it might end up being a different story. We’ll just have to pay attention to the bond market. As things stand right now, over the next day or two, it’s probably a bullish market.

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