Silver Markets Continue Dropping

Silver markets have fallen again during the trading session on Tuesday to break down below the $25 level. This is a rather negative turn of events, so I would not be surprised at all to see some type of continuation given enough time. I do not believe that this is a market that you want to get involved in, at least not until the FOMC statement and press conference get out of the way. There are a lot of concerns as to whether or not the Federal Reserve is going to continue its tight monetary trajectory, especially as inflation is a major issue. If that is the case, that could strengthen the US dollar and therefore cause major issues for silver.

SILVER Video 16.03.22

On the upside, if we can recapture the $25.50 level, then you could make an argument for silver rallying, but I do not necessarily think that is going to be the case at this point, at least not in the short term. The 50 Day EMA did just cross above the 200 Day EMA, showing the so-called “golden cross”, but that is almost always a late signal.

Industrial demand of course comes into the picture as well, as silver is just as much an industrial metal as that is a currency. That being said, there are a lot of concerns about the global economy slowing down, and therefore demand for silver may actually drop as a result. When I look at this chart, there is the possibility of a bounce, but I think it needs the Federal Reserve out of the way to truly make its move.

For a look at all of today’s economic events, check out our economic calendar.