By FXEmpire.com
The Monday session saw the silver markets continue the grind sideways to upwards, and this simply shows that the silver market is torn between two main driving forces in our opinion, however this isn’t exactly that original as well as it often is.
Those two forces include the inflationary and fear trade, and of course the industrial trade. The silver markets can often act as “poor man’s gold” as it is a precious metal and can move much like the gold markets. The Dollar can sometimes work against it though when it takes this role on.
On the other hand, there is the industrial trade as well. The demand for silver will certainly continue to be weak as the global economy slows down in general. The economies around the world continue to struggle, and as long as that is the case, it is very difficult to imagine a situation where silver suddenly becomes demanded by the factories around the world.
The price action lately has been very stagnant, and as a result it has been very difficult to trade this market. The hammer from the Friday session will have been triggered by the action on Monday as the highs of that session have been broken, but the fact that the candle appeared in the middle of very messy action over the last several weeks has us hesitant in going long. Also, the trend isn’t exactly supportive at this point either.
The action over the last several months has been poor at best in this market, and as a result we certainly have a downward bias in this pair. The lows have been held tight by the $27 level time and time again, and to get truly bearish, we need to see this level broken on a daily close. The $30 level above has been very resistive over the recent past, and this should continue to have this pair bouncing around in general. We are bearish overall, so the other possibility for us is to sell this pair if we get weakness on a rally.
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Originally posted here
