Silver has been following the lead set by gold over the past several months, and this has led to the sister metal of gold to be beaten down, underappreciated, and some say extremely oversold. There’s not much hope for silver as long as gold remains weak, and there hasn’t been any sign that gold is going to reverse its downtrend anytime soon.
On a technical basis our analysts point out
that silver prices have recently broken below the long-term support at the
$15.55 level, and the uptrend line on the hourly chart which was at the $15.45
level. The next level of support is at $15.30, and we’ve seen strong demand for
physical silver down to the $15.00 level in the past.
On the other side of the trade the slope of
the long-term downtrend line is flattening, and a bounce that goes back to that
downtrend line would see price coming back near the $16.50 level. That would
put silver price right back in the center of the trading range that was seen
from February through June of this year.
The real driver for silver of course will
be the U.S. dollar. While silver does still have industrial uses, it is far
more sensitive to the U.S. dollar. With interest rates expected to continue
rising in the U.S. through the end of 2018, the U.S. dollar should continue to
exhibit strength, and that’s bad news for silver.
Source: FXEmpire.com
