By FXEmpire.com
The silver markets fell during the Tuesday session as the Federal Reserve released their minutes from the last meeting. The minutes made no implicit mention of a new round of quantitative easing, and as a result the Dollar gained in general. This had people running for the exits in the commodity pits, and the silver market was no different.
The $33 level was pierced before the release, but the pullback ensured that we ended up under that resistance level at the close. Because of this, the market looks as if it is ready to continue to bounce around between the $33 level and the $31 handle. $30 is also a place where we could see buyers step in, and as a result we think this market falls, but only for the very short term. In fact, a sideways grind could very well be the case.
The argument for the silver market to perform at these levels can be made by the fact that the Federal Reserve doesn’t see the need for another round of easing, which means that the economy is perhaps getting closer to normalcy. This of course means more strength in the manufacturing sector, and that means more demand for silver from an industrial angle.
The candle for the Tuesday session is somewhat like a hammer, but perhaps has fallen a bit too much to be a perfect one. This of course will only reinforce the idea of bearishness. The silver market will often move with the gold markets, and this time shouldn’t be too much different. However, with a healthier economy we could see the silver markets just a bit more like to be buoyant than gold in the near term.
The overall trend is still up, and as central banks continue to print money and ease around the world, the precious metals will still find a bid at various levels. Even if the Dollar does rise, there is a healthy likelihood that the metals will rise in time, but only after a pullback. Out of the two at the moment, silver looks to outperform gold. A daily close below $30 has this market much lower, while the close above $33 has this market running to the $34.50 area. (With resistance all the way to $35)
Silver Forecast April 4, 2012, Technical Analysis
Originally posted here
