By FXEmpire.com
The silver markets came completely undone during the session on Wednesday as the Dollar continues to gain. The fears of slowdown around the world, and most specifically China, will have an effect on this market over time as well. As the commodity is priced in Dollars, it makes sense on a day that the world is running to the safety of the Dollar that this market would suffer.
The market fell to the $31 level before bouncing at the end of the session. The level is the first of our major support levels that we have been watching. Because of this, we are now watching how the silver markets will react over the next couple of session. With the Non-Farm Payroll announcement coming on Friday, we could have a sideways market between now and then.
The $30 level is the “floor” for us, and the level would be where we need to see the market hold, or we would suddenly be very concerned for the bulls. Any supportive candles in the vicinity would of course catch our attention, and we would be willing to go long at that point.
With the central banks around the world easing, one has to think that there will eventually be a demand for precious metals. The silver markets will also be influenced by the industrial demand as well, so this will be a concern too.
All of this being said the fact that the candle was so bearish for the session and the close was so close to the bottom – we are very leery of buying at the time. We think that the market will need to settle down a bit before we can get involved, and with the aforementioned jobs number coming in just 48 hours, we think that the market will show it’s true colors soon, but probably not until we get through that event. Until then, we are watching silver, knowing that the market is in the neighborhood that we want to see it fire off a signal for us to buy again. A daily close below the $30 level actually has us considering a sell position.
Silver Forecast April 5, 2012, Technical Analysis
Originally posted here
