Silver Price Forecast – Silver Gives Up Early Gains

NEW YORK (March 1) Silver has initially tried to rally during the trading session on Wednesday, showing signs of strength again after a very bullish trading session on Tuesday. However, we have given back some of the gains near the $21.25 level, an area that previously had been noisy. Whether or not we can recover completely is a different question altogether, but at this point I do think that we have a real shot at some type of bigger move.

If we can break above the highs of the trading session on Wednesday, then we could have a bigger move but right now it does not look like we have a lot of momentum. This does make a certain amount of sense, because perhaps we will have to build a bit of a base, and of course confidence in order to start buying such a volatile market that had sold off quite drastically as of late.

Furthermore, you need to understand that the market continues to see a lot of external factors including such things as a lack of industrial demand, and of course the fact that the US dollar has been very strong. Because of this, I think it’s probably only a matter of time before you will have volatile and sudden moves. Whether or not silver can disconnect from the negative correlation remains to be seen, but it is something that will have to happen in order for silver to really start to take off in this environment.

Keep in mind that interest rates also come into play, due to the fact that the bond markets continue to be very noisy, ultimately, higher interest rates in the United States typically works against silver, but if people start to look at silver as a way to preserve wealth, that could come into the picture as well. Either way, I think that the $20 level underneath is a “hard floor” in the market, and as long as we can stay above there, I do believe that it is very likely that silver will continue to find buyers on dips. A breakdown below the $20 level would be very negative for this market to say the least.

FXEmpire