Silver Markets Plunge Toward Support

Silver markets have fallen rather hard during the trading session on Monday to break the back of a couple of hammers and reach the $25.50 level. Because of this, the market is going to continue to see downward pressure on short-term rallies in this type of scenario. The silver markets are getting beaten up as the US dollar strengthens and has had a little bit of influence from the gold market as well. Because of this, I believe at this point in time we are at a crucial crossroads for the silver market, and if we cannot hold this area, we are at the same area we broke out of, so this needs to hold.

SILVER Video 15.03.22

If we were to break down below the $25 level, that could open up a major move lower for silver, as it does tend to sell off much quicker than gold or other commodities. Silver is an extremely volatile instrument, so you need to be very cautious about the position sizing, and therefore I think we are looking at a situation where the prudent trader will use very small size and perhaps wide stops.

Remember that silver is not only a precious metal, but it is also an industrial one. The concern now is that we are going to sell off due to the fact that the economy around the world is going to slow down. I think that bodes poorly for silver, so it will be interesting to see how this plays out. The market continues to be noisy, so the most important thing you can do is protect your account in this scenario.

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