By FXEmpire.com

Silver markets had a slightly bullish day on Tuesday as the consolidation continued in this market. The buyers did manage to push the market above the $28 level, so that is something to hang their hat on, but more than likely we are going to see downward pressure in the near term as this consolidation has been so well-defined.

However, when you look at the charts you can’t help but notice that the lows are getting higher and higher over time – albeit only slightly. This does suggest that there is upward pressure in the silver markets currently, and with all of the easing around the world via central banks, it would make sense of course as inflation should eventually pick up. However, we do not see a reason to buy into the silver rally until we break the $30 level, as there is so much noise above.

As for selling this commodity, the $25 level is the “beginning of the end” as far as the uptrend is concerned in our eyes. If we could get a daily close below that level, we would be more than willing to sell this market hand over fist. However, this looks very unlikely and we do believe that eventually this market does go up over time. After all, the markets are pretty dead set on seeing quantitative easing coming out of several central banks, and as long as there is the possibility of that – traders will refer to go into precious metals overall.

The one thing that works against it over of course is the industrial part of the equation, and that is still working against it. The demand for industrial metals is down, but the idea is that more stimulus should continue to push economic expansion forward, and therefore the demand for silver. However, we have seen recently that this doesn’t work for any length of time, and will make this market prone to fits and starts.

At this point in time, this is a very short-term traders market and we do not feel that it is one of the easier markets to trade rainout. We do have an upward bias, but are willing to act on it quite yet.

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Originally posted here