Silver market consolidating before move

The silver market has rushed down the charts as mentioned in previous articles and now looks to be going through a period of consolidation. I had thought that a further dip lower might have been possible, but it looks to me like the market has run out of steam when it comes to silver.

The current price floor can be found at 19.30, and we have seen the market pull back upwards on a number of occasions. However, there just has not been the momentum to carry it any higher, particularly with a USD that is strengthening for a change.

A quick look on the daily chart shows there is still another strong level of resistance further down followed by a much more solid long term floor that is part of the current triangle pattern.

Tonight we will see strong movements in silver, especially with the US unemployment claims data coming out - which has the power to move markets strongly.

Currently we are consolidating on the chart with the news out tonight we could see some very sudden movements.

What’ is interesting to note though is the correlation between gold and silver; at present there is some justification in the market that gold is slightly bullish – even though long term is all down hill by the looks of it. So tonight’s market movement if it were bearish and gold dropped we could expect to see silver react accordingly.

Though, it’s also worth nothing the divergence between the two metals in terms of movement over the past year. No longer hand in hand do they move, but they do still somewhat move together. So it’s something to pay attention to at present.

Overall, silver is consolidating before the next big move. It’s clear that there can be some move lower in the trend line, and that could be followed by an opportunistic patch of consolidation.