Silver has been showing some strength in the market, but it seems like we are consolidating after a massive move higher. This is a healthy sign for the market, as it allows traders to come back into the market and balance things out. However, the short-term traders are the ones who are likely to come back to this market on short-term debts, while long-term investors are probably thinking along the lines of wealth preservation.
It is essential to note that silver is highly sensitive to industrial demand, which could work against it in the short term. This is especially true since there are many concerns worldwide regarding global growth, which could be a driving force in bringing this market down. Despite this, the wealth preservation aspect seems to be a huge driving force, and investors are likely to hold onto their silver assets.
Looking back at the market, we can see that the $24 level is a significant magnet for price, and it is where the market launched from. However, just above this level, there is a lot of noise between here and the $26 level, which could cause a lot of trouble. Therefore, it is only a matter of time before we see some type of pushback in the market.
Silver $23.50 level could provide support
It is also worth noting that the $23.50 level underneath could provide some support for the market. If we break down below that level, we could go down to the 50-Day EMA. Nevertheless, shorting this market right now is not recommended as it is overextended. It would not be wise to chase the market all the way up here either.
In conclusion, the silver market is in a consolidation phase after a significant move higher. Short-term traders are likely to come back to the market, while long-term investors are thinking of wealth preservation. Industrial demand sensitivity and global growth concerns could work against the market in the short term. However, the wealth preservation aspect remains a significant driving force. Traders should be cautious and avoid shorting the market or chasing it all the way up here.
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