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Christopher Lewis

Looking at the candlestick, you can see that it is somewhat neutral at the moment, and therefore we may get a little bit of a pullback or at the very least some sideways trading in the silver market as we had perhaps gotten ahead of ourselves. The $25 level underneath is massive support that extends down to the $24 level, so I think it is only a matter of time before the buyers return. However, if we were to break down below the $24 level, it is likely that we could go looking towards the $20 level underneath. That of course is a major, round, psychologically significant figure, as it took so much to break above there.

SILVER Video 24.08.20

When you look at the longer-term chart, a return to the $20 level is not necessarily unrealistic, because after all it has not been retested for support after the massive parabolic breakout. I do not necessarily think that is going to happen, but it is not out of the realm of possibility. That would obviously need to see a stronger US dollar, so it is worth watching the FX markets at the same time. With that being said, it is worth noting that a lot of the currencies around the world look like they are ready to give up some of the gains against the greenback. With that in mind, I think it is only a matter of time before correlation between the FX markets and the silver market, but I still believe that there is an argument to be made for precious metals, no matter the currency you are measuring it against.

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

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