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“Any attempt for the bears to push it lower from $28 should run into strong headwinds. While some of the longer-term shorts would like to see lower prices, the demand in the physical market has been enormous, so despite the pullback, silver remains a buy.”
While silver has been consolidating between roughly $28 to $31 for quite some time, the demand for silver has not faltered.
As far as the silver bears are concerned, the wind has definitely been in their face for some time. If they are to relinquish control of the $30 area, paving the way for the next leg higher in silver, it will be because ongoing tightness in the market forces that retreat to higher prices.
For the time being, although silver has been marked down, insatiable demand continues to concern the shorts. This apparently also has some of the traders looking for a final quick move down to form a bottom here.
Eric King
$28 Should Hold on Silver, After Final Move Down
With gold and silver continuing the longer process of digesting the 2011 move higher, many traders are looking for a final down move to put in a bottom. One trader out of London commented, “The physical market is still extraordinarily tight here. Somewhere around the $28 area there should be a firm base as there is tremendous physical demand in that zone.”
January 14, 2011
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