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Christopher Lewis
Silver

Silver markets broke down a bit during the trading session on Friday, gapping below the $16 level at the open and then started to race towards the $15 level. At this point, the $15 level is massive in its importance as it is a large, round, psychologically significant figure. At this point, if the market does break down below the $15 level it could be very drastic for silver. Keep in mind that silver is not just a precious metal, but it is also an industrial metal. With that being the case, it will continue to struggle as demand is going to crater.

SILVER Video 16.03.20

Looking at these candlesticks, it’s very obvious that the negativity is certainly baked in. That being said, there is actually no hint of inflation either, so even though central banks around the world have been extraordinarily loose with their monetary policy end are getting even more so, inflation isn’t an issue anytime soon. That takes out the idea of the precious metal part of silver, so if you don’t have industrial demand and you don’t have inflation, silver will underperform. If you been watching my videos, you know that I have talked about people doing “pairs trading”, buying gold and selling silver. That works because if silver craters like it has, it absorbs your gold losses and in fact should outperform those losses thereby causing an overall profit. That being said, I think that silver is going to test $15. If we bounce from here, I will anticipate that the $16 level offers certain amount of resistance.

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