Silver Pulls Back From Crucial $22 Level

NEW YORK (Nov 11) Silver has had a very bullish week, touching the $22 level. However, it has pulled back from that area on Friday, so it suggests that there may be a lack of follow-through. It remains to be seen whether or not the buyers will come back, and a lot of this of course will have to do with the Federal Reserve and whatever it is that they are going to do monetary policy wise. That being said, a lot of people have jumped the gun based upon “just 7.7% year-over-year inflation.”

Because of this, the US dollar has fallen, yields have dropped, and happy days are here again. This sets up as a nasty bull market rally, and it’s very likely we will get a huge slam lower. However, that doesn’t necessarily mean that we are going to fall out of the sky, just that I think a correction is probably warranted. However, if we break above the $22 level, and we very well could, that would show the market is ready to continue going higher. At that juncture, I would assume that the market will go looking to the $24 level, followed by the $26 level.

It is a bit rich to think that the Federal Reserve is suddenly going to change its monetary policy with almost 8% inflation, and 3 ½ times what they are targeting. However, the emotional and hopeful out there have really thrown the market into a loop over the last couple of days. That being said, that’s exactly what bear markets do, throw volatility back and forth.

FXEmpire