Gold Market Wire
News, analysis and commentary for gold traders and investors
Silver Market Update
Silver Feels the Heat of the US Dollar
March 25, 2021 - (Gold Market Wire) - Silver is swooning in the face of a US Dollar that, contrary to the "Commentariat", simply won't quit. We pointed out the round $25.00 level as the next target point for Silver and, we got there with a fair amount of ease, and followed through (though not on close). With the 100-day moving average now in rear-view mirror, Silver has been properly shaken.
As we zoom in we can see the trend line getting challenged, but Silver is volatile, so we can't put too much store in that alone. Far more important, however, is the the move through the 100-day moving average (blue line) which is really cautioning us that Silver could downdraft all the way to $22 if a recovery doesn't ignite soon.
All in the course of a normal day for a Silver trader - that refined seeker of alpha and wild market machinations. Let the lesson be learned about sizing trades in this market...it's a true finalist for the schizophrenic of the century award.
The 'culprit' for all this price action is, of course, the equity market uncertainties, which we warned about earlier this week and last. Yesterday we got the first indication of potential problems with a NASDAQ sell-off of some 2%, and, perhaps even more importantly, a close right on the day's low. The market is on edge right now, and the correction everyone has been wondering about could be ready to take hold. All of this has been encouraged by a US Dollar that simply won't quit. We have now touched 1.18 eur/usd, and those heady days of 1.23 are long gone and not coming back. As regular readers know, we've been amongst the few Dollar bulls in the market, and we see no reason to change that forecast. It is our one open position.
Gold is doing its best to hang in there, and has put in a decent performance, all things considered, hanging on to $1730.
All eyes are on the stock market for the next week and today's and Monday's action will be crucial for the Metals. The equity markets have a history of doing strange things on Friday's and Monday's so be prepared. Right now, the safest bet in the house still looks like the US Dollar, despite what the detractors have been yelling about since the start of the year...and the past decade, for that matter.