By FXEmpire.com
The silver markets fell during the session on Monday as the tight trading conditions continue. Even with the situation in Europe deteriorating, the silver markets couldn’t be bothered to move. This suggests to us that we are certainly in some type of summer slowdown, and think that this market will be relatively difficult to trade because of it.
Below the current price, we have the $25 to $26 support range which has been keeping prices elevated for some time now. This is a longer-term support and resistance area, and as such it will take something somewhat special to break through. Is because of this that we feel the upside is probably the easiest route to take, but we need the liquidity to come back into the marketplace before we see any meaningful breakout.
We see the $30 level as significant resistance, and once we get above that we think this market could really take off. This of course would predicate itself upon Dollar weakness, which is something that we may not necessarily see anytime soon. In fact, the most likely scenario for this to happen would be for the Federal Reserve to actually start easing again. This doesn’t necessarily mean that it won’t happen, just that it’s going to need a little bit of a push.
Whether or not the Federal Reserve eases is really one of the biggest questions that can be asked right now in all of the risk related markets. The silver market isn’t going to be any different, but it does have the weight of the industrial usage part of the equation around its neck. Because of this, we feel that even in a situation where the Federal Reserve eases, the silver market will continue to underperform the gold market.
With all this being said, we aren’t interested in buying silver at this moment in time, even though we feel that ultimately this market will more than likely rise. Will we would need to see to be comfortable with a large position long would be to break above the $30 level. Until then, this is going to be a very choppy and short-term traders market at best. At the present time, even that is going to be difficult with the range been so tight.
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Originally posted here
