
Monday we saw a continuation of last week’s momentum in silver with the March silver contract pushing as high as 30.350, but that move was quickly given back as the market traded down to a low this week of 25.935 on Thursday. The bears are in control after this week’s action but the trend higher remains intact. Monday’s push higher looked to be caused at least somewhat by a massive increase in demand for physical coins with many retailers online getting completely wiped out on their inventory. The rally was short lived with a strengthening US dollar, higher stock market, and positive US economic data providing pressure to the metals markets. Also, no fresh talks of a stimulus package getting passed this week probably helped push silver down as well. There currently is a disconnect in the futures price and physical silver coin price with demand remaining high for physical coins. March silver looks to be trying to build some support off of the 26.350 level which is good news for the bulls. Another washout lower would push down to find support at 25.000. The bulls need to see a close above 27.750 to restart a rally and go test the 30.000 level again. Silver still could see another move lower as its in the middle of a sideways range. Watch the dollar and US equities to determine which direction the market will be pushed next.
