The new short-term range is $55.60 to $63.28. Inside this range is the $59.44 to $58.53 retracement zone. Holding this zone will indicate that aggressive counter-trend buyers are trying to establish support. If they fail, we’re likely to see a test of the main bottom at $55.60. If they are successful, then buyers will make another run at $63.28. Take out this level and the short-term trend changes to up with the focus shifting to the 200-day moving average at $70.06 and the 50-day moving average at $70.53.
The longer-term picture is all about value. But this is mostly for the silver investor, not the silver trader. Long-term investors see a major value zone at $60.83 to $46.48. It’s a wide range, but that’s what you get when your all-time high is $120.67. The longer-term investor has the time to build a position inside the support zone.
The problem is, he’s playing against the short-term trader. If the short-term trader can establish a new support base like I wrote about earlier, then with the help of the long-term investor, there’s hope for an upside breakout over $63.28.
From both the short-term trader and the long-term investor, the 200-day MA at $70.06 and the 50-day MA at $70.53 could be a problem. Not only are they potential resistance, but also a major barrier to the uptrend. This area has to be cleared to get the institutional bullish traders on the same side as the retail bull and the long-term investor.
The real test is whether all three groups line up. The long-term investor is buying value. The short-term trader is looking for a base. Institutional money needs both of them to clear the moving averages before it commits. Until that happens, Spot Silver consolidates between $55.60 and $63.28.
What to Watch
Brent above $79 is the number that matters for Spot Silver right now. The Iran ceasefire is dead, the Strait is getting worse, and every dollar crude adds from here feeds the inflation repricing that crushed the post-payrolls longs on Wednesday. A pullback in oil gives silver room to breathe but the June FOMC minutes already told traders the committee is closer to hiking than cutting. That does not expire with one quiet day in the Persian Gulf.
The $59.44 to $58.53 retracement zone is where the bulls either prove they have real money or give it up. Hold it and $63.28 comes back into play. Lose it and the next stop is $55.60.
More Information in our Economic Calendar.
Source: Original Article
