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Christopher Lewis
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Silver markets have broken down significantly during the course of the trading session on Monday, as the general “risk off trade” has come back into the conscience of local traders, and of course silver will take a significant beat down due to the fact that it is so highly correlated to industrial demand, turnabout due to the coronavirus variance spreading around the world. Furthermore, we have economies locking down along the concerns of the Delta variant, and therefore a lot of traders will be very cautious.

SILVER Video 20.07.21

All that being said, there is still an uptrend line that we need to pay close attention to, and of course the $25 level. The $25 level underneath is a large, round, psychologically significant figure that a lot of people will be paying close attention to. If we break down below there then I think it opens up significant selling pressure in this market, perhaps opening up a move down towards the $20 level, underneath which is a large, round, psychologically significant figure as well.

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Quite frankly, that would be a big selloff, and it would go right along with a major “risk off trade” around the world. It would not just be the silver market; it would be multiple other markets that would be selling off at the same time. Beyond all of that, you need to pay close attention to the US dollar which of course is starting to pick up a lot of strength. With the US dollar strengthening overall, you need to keep in mind that there is a bit of the currency correlation that you need to pay attention to.

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

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