Silver Price Forecast – Silver Plunges
NEW YORK (June 29) Silver has plunged initially during the trading session on Thursday, reaching down toward the $22.50 level. Ultimately, this is a market that is trying to figure out what to do with itself, due to the fact that the industrial demand may be plunging, but at the same time we have to look at it through the prism of whether or not it is going to be used for wealth preservation. Beyond that, you have the negative correlation that the US dollar typically has with silver, and the US dollar has rallied a bit over the last couple of days. Because of this, I think you have a scenario where traders are trying to figure out what to do next, and the fact that the 200-Day EMA stitches above as resistance, it looks like we are squeezing in general.
If we break down below the $22 level underneath, then it is possible that we have a scenario where the silver markets plunge down to the $20 level, which of course is a large, round, psychologically significant figure. In this environment, I think this is a situation where the market will continue to be very noisy, but all things being equal, this is a situation where we will have a lot of choppy behavior, and with that being said, you will have to be cautious with your position size. After all, silver is very volatile under the best of circumstances, so you need to be cautious with the amount of exposure that you have at any moment in time.
Pay attention to gold, because gold and silver do tend to move in the same direction over the longer term as well, so that’s probably something worth paying attention to as a secondary indicator. Ultimately, I think we are at a major point of inflection, and therefore we need to pay close attention and make sure our position size is reasonable. However, if we can break above that 200-Day EMA on a daily close, we can see a run toward the $24 level rather quickly, as it would be thought of as “value.” Regardless, the only thing you can control in this type of environment is your position size, so trade accordingly.
FXEmpire
