• 3 hours America’s Workforce Elderly Workforce To Double By 2028
  • 9 hours Toyota Tests Solar-Powered Prius
  • 1 day Why The Gold Rally Flatlined
  • 1 day The Uranium Sector Can’t Catch A Break
  • 2 days Upcoming Fed Meeting Has Investors On Edge
  • 2 days Global Gold Sector Outlines Responsible Mining Principles
  • 3 days China’s Giant Vampire Fund Loses $120B
  • 3 days McDonalds To Roll Out Robot Drive-Thru Clerks
  • 3 days Savvy Investors Are Betting Big On This Little Data Company
  • 4 days How The Government Is Wasting Tax Money This Year
  • 4 days Supply Concerns Halt Expansion On Tianqi Lithium Plant
  • 4 days The World’s Biggest IPO Is Almost Here
  • 5 days The Relatively Of Money And Happiness
  • 5 days Wall Street Unfazed By Recession Fears
  • 5 days SoftBank Urges WeWork To Pause IPO Plans
  • 6 days Anti-Aging Market To Hit $55 Billion
  • 6 days JPM, Morgan Stanley Take Advisory Roles In Aramco IPO
  • 6 days Are Bonds In A Bubble?
  • 7 days The Unknown Media Giant Taking The World By Storm
  • 7 days From Millennial To Millionaire With One Simple Trick
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Silver Market Update

Originally published November 8th, 2015.

The last update posted on 18th October called a top in silver, and that is what it turned out to be. On its 3-month chart we can see that silver broke down from a small Head-and-Shoulders top at the end of October and then went into a steady day after day decline with the result that it has dropped now for 7 trading days in a row. While it could drop further towards or to the support shown, it is getting short-term oversold and is increasingly likely to bounce soon. As with gold this weakness was triggered by dollar strength, with the dollar rising sharply on Friday in response to a stronger than expected jobs report which the market thinks makes an interest rate rise more likely.

Silver 3-Month Chart

The 1-year chart provides more perspective and on it we can see that the support in the $14.25 - $14.50 zone is quite substantial, so that even if silver is destined to go on to break below this support, it is likely that it will at least pause and mark out a trading range in this zone, and possibly bounce. As we can see from moving average alignment the overall ttend remains down.

Silver 1-Year Chart

Although Commercial short positions in silver eased somewhat by last Tuesday, as we can see on the latest COT chart, and will probably have continued to improve late last week, this latest COT chart still looks awful and implies that, short-term bounce or not, silver is set to drop much more, which implies that the dollar rally will continue.

Silver COT

How far could this nascent downleg take silver? On its 7-year chart it looks probable that silver will drop to the lower boundary of its major downtrend, in which case we are looking at it dropping to the $10 area. Bulls had better hope that it stays above the inner pale trendline shown, which would hold out the chance that the downtrend is morphing into a bullish Falling Wedge, but the still awful COTs suggest that this is a forlorn hope and that much lower prices lie ahead.

Silver 7-Year Chart

The dollar strength which is the root cause of the weakness in gold and silver, and other commodities, is discussed in the parallel Gold Market update , where we see that the dollar may be starting a big uptrend that takes it as high as the 120 area on the index, as a result of continuing extreme weakness in the suro.

 

Back to homepage

Leave a comment

Leave a comment