Silver Technical Analysis
Silver continues to rally pretty significantly during the trading session here on Wednesday in the early hours, as it looks like we are hell bent on going to the $40 level. $40, of course, is a large, round, psychologically significant figure and an area that a lot of people will be paying close attention to. The $40 level of course is an area that probably causes a little bit of noise due to its psychology and perhaps options trading. But when you see this, it certainly looks like we are at least trying to break out to the upside, and it’s probably only a matter of time before silver really takes off much higher.
A break above $40, I believe, opens up the possibility of a move to $42.50, based on the consolidation range that we are now trying to exit. We’ll just have to wait and see. A shrinking US dollar will turbocharge this, so watch the US dollar in the Forex markets, because that might be reason enough for this market to truly take off. So, at this point, I think this is a market that either breaks out to the upside, or a short-term pullback allows for value to be found, and buyers will pick up cheap ounces of silver going forward.