By FXEmpire.com
The silver markets continued their lackluster performance on Tuesday as the trading world looks ahead to the European Union’s summit on Thursday and Friday. While the traders around the world were willing to give the Europeans the benefit of the doubt over the last couple of years, it looks as if now patience is starting to run out. Unlike many of the other weeks before a summit, we are not seeing a “risk on” attitude as the markets try to get ahead of any positive news coming from Europe.
With this in mind, it is of no surprise that the silver markets would lag. The $27 level is the beginning of serious support, so we do think that while the trend is down there will be a bit of a fight. From our calculations, the $25 level is the very end of anything supportive in this market for the foreseeable future. With the trend being so heavily to the downside, we certainly have no interest in buying this market at this moment in time.
Recently, we have seen a consolidation between $27 and the $30 mark. This level has been pretty constrictive, and even with the slight break lower – we still feel that the support is fairly strong. However, we still agree with the idea of selling silver and as such will look to fade rallies when they appear. This makes sense, as the silver markets also have to facilitate the industrial demand part of the equation as silver is every bit the industrial metal as it is the precious metal. It is because of that that the gold market will more than likely offer a better return over the long term if the metals do get a bid.
We are selling short term resistive candles, and rallies that show weakness on the same charts. Perhaps on the four-hour or even one hour charts we will find our signals. We simply cannot buy silver at this point in time, or at least until it clears $30 mark on a daily close. We will continue to trade this market short-term, and on the downside.
Click here for further Silver Forecast.
Originally posted here
