By FXEmpire.com
The silver markets rose on Thursday as Federal Reserve members suggested that easy monetary policy was going to be around for some time. With this, the idea of fiat currencies, and the Dollar specifically, lost their luster. Metals and commodities in general all had a nice move, and this looks to be the start of a potential breakout in the silver market as well.
The downtrend line is being pressured again, and it is in this scenario that we suggest a continuation of the up move from the Thursday session will bring in another round of bullishness in this market. The weakening of the US dollar will continue, at least until the problems in Europe come back to the forefront. (Which could be a few days judging by the recent market action.)
The $31 level has held as support, and looks to be a bit of a base for this market at the moment. The longer-term cyclical positioning of the silver markets is certainly bullish, so a continuation has to be the most likely of all outcomes in the long-term. Silver also has a lot of other factors behind it rather than just an anti-Dollar play. The silver market is also moved by the various industrial factors in the markets, and as the global growth story looks solid – the demand for silver in manufacturing expands. This of course will continue to push the price of silver higher, and the growth in the emerging markets should continue to do this as well.
Longer-term, we are bullish of both silver and gold. The silver markets are certainly one that is affected by tight supply. In fact, there is a lot of anecdotal evidence that there simply isn’t enough silver to fill all demand around the world.
On a break of the highs from Thursday, we would be willing to buy this market as it shows a real continuation above the downtrend line. The overall picture for silver is good, and the trend is most definitely to the upside when looked at through the prism of a decade or so. Selling isn’t a thought until we are at least sub-1.30 or so.
Silver Forecast April 13, 2012, Technical Analysis
Originally posted here
