Silver Gets Hammered for the Second Day in a Row

New York (Sept 17) Silver markets broke down towards the $22.40 level, an area that had been major support previously. That being said, pay close attention to the US dollar, because it gives you a bit of a “heads up” as to where we could go next.

Silver markets have broken down again after initially trying to recover on Friday, as the $23 level now is starting offer significant resistance. The silver market is very volatile, and very sensitive to risk appetite. Furthermore, you also have to pay close attention to the US Dollar Index, as the US dollar has a major negative correlation to this market. That being said, the $22 level underneath is a major support level that we have to pay close attention to due to the fact that it has been important more than once.

If we were to break down below the $22 level, then it is likely that we go looking towards the $20 level, possibly even lower than that given enough time. This will all be about the economic expectations, and therefore pay close attention to economic figures as silver is more of a “risk on” type of material. Furthermore, it also has a lot to do with industrial demand, so pay close attention to that as well. Because of this, the market will see a lot of correlations building.

As the US dollar strengthens, it suggests that there are concerns out there when it comes to global growth and of course risk appetite. As long as that is going to be the case, this is a market that will struggle. Quite frankly, I would not be surprised at all to see this completely fall apart. We are at a major area of confluence when it comes to support on longer-term charts. Soon, we will have an answer to where we go next.

FXEmpire