Silver markets have broken down significantly during the day on Tuesday to slice to a fresh, new low, suggesting that there are further losses ahead. If that is going to be the case, then we need to pay close attention because silver could start to fall apart quite drastically. If it does, I would anticipate a move to the $24 level rather quickly, followed by a drop towards the $20 level over the longer term.
SILVER Video 28.07.21
Keep in mind that silver is greatly influenced by the industrial demand part of the equation, which of course has the attention of traders in general with the reopening trade being a huge part of the narrative right now. As long as that is still what traders believe is going to continue to drive the market higher, it does make a certain amount of sense that we should see silver eventually find a bit, but if the US dollar starts to strengthen or if there are holes blown in that narrative then that could continue to weigh upon this market.
Nonetheless, I think silver is something that is worth paying attention to, but you also need to be very cautious about your position size as the volatility can get rather drastically thrown around. That being the case, keep your position size smaller than usual, but once we get some type of follow-through than it is obvious that this market is going to make a big move. Quite frankly, the downside is looking more likely than not, as questions remain about the ability of the economy to reopen completely, and of course PMI figures coming out of various large countries do not look necessarily that good.
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