Silver Futures Index $SILVER (SILVER)

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Silver Continues Its Plunge
By: Christopher Lewis | December 11, 2023

• Silver dropped yet again during the trading session on Monday, as it looks like we simply cannot find buyers.

Silver Markets Technical Analysis

Silver has plunged lower again during the trading session on Monday, as we simply cannot find buyers for this market. That being said, the selloff has been so drastic that will be interesting to see how this plays out. The $22 level underneath should be massive support, and it certainly looks as if we are going to try to find our way down to that level. Rallies at this point in time would be looked at with suspicion, and as long as gold continues to fall, I just don’t see how silver does any better.

All of this being said, keep in mind that central banks meet this week, including the European Central Bank, the Federal Reserve, the Bank of England, the Swiss National Bank, and a few other minor ones. In other words, the interest rate markets may be very volatile, if that is going to be the case, it’s very likely that silver will suffer as a result. After all, silver is extraordinarily sensitive to interest rates in general.

Furthermore, the silver market is an industrial metal as well as a precious one, and therefore some of the selling might be due to the fact that everybody expects to see a rather nasty recession around the world. That being said, this is a situation where the market is likely to remain suspicious of rallies, and therefore I think we need to see some type of follow-through in order for buyers to step in and try to pick up “cheap silver.” Either way, the one thing that you do want to make sure you avoid at this point in time is going to be a lot of leverage, because under the best of circumstances silver tends to be extraordinarily volatile.

Quite frankly, these are not the best of circumstances and as we head toward the holidays, liquidity could start to be a major issue. With this being the case, the market is one that you need to be very cautious about, but clearly there should be some type of value proposition presenting itself sooner or later. The question of course is when does this happen, and are you going to be patient enough to take advantage of it?

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