Silver Continues to Watch $115 Closely Ahead of FOMC

NEW YORK (January 28) The silver market has gapped higher to kick off the trading session on Wednesday again but does seem to be running into a little bit of trouble in the neighborhood of $115. This is a market that has been absolutely parabolic for quite some time. This is a market that people cannot stop talking about at this point. That’s generally when I get nervous, but selling is all but impossible.

Wednesday should be interesting due to the fact that it is the Federal Reserve interest rate decision day. Now, there is no interest rate change expected by the Federal Reserve. That’s not really what people are focusing on. What they are focusing on is whether or not there is a hint that we are going to see some massive rate cutting cycle or is the Federal Reserve going to be mildly hawkish while still talking about loosening rates eventually.

Federal Reserve Interest Rate Decision

Look for the phrase “data dependent.” That probably causes some headaches for those short of the dollar and that could find its way into the silver market. This could set up a nice trade, if people start to panic a bit – as they typically do.

Right now, though, it looks like the $100 level is going to be a significant support level. As you can see from the chart, clearly defined are our little areas of interest every $10. So pay attention to that as well. Buying on the dip probably remains the most feasible strategy here as the market has been so aggressively bullish.

FXEmpire