Demand Drivers
Silver is getting a boost from a lot of different reasons. The AI demand in data centers I guess, is part of it. There is also the green energy aspect, and then on top of that, there is just the way central banks are behaving at the moment. They are loosening monetary policy while governments are neck deep in debt, and it is a way to protect wealth. It is probably not the best way, but I think once you add all of these things together, you get this kind of mess.
Ultimately, this is no man’s land. We are approaching $70, and the best you can do at this point in time is look at dips as potential buying opportunities at psychologically significant numbers. For example, the $65 level and the $60 level both could be candidates for support that you would take advantage of, but it is almost impossible at this point to determine exactly where we will bottom out on any pullback. It could be a lot shallower than we think. We are getting close to the holidays, and liquidity will be a major issue here, so with that in mind, we could get an erratic move to the downside, mainly just people taking profit out of the market.
After all, if you got long in silver sometime in November at roughly $49 an ounce and here we are over $69 an ounce, and you are getting to the holidays and low liquidity, it would make sense to close out your position and take those massive gains out of the market. Overall, this is a trend that is really hard to fight at this point.
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