Key Insights
Silver is under strong pressure amid global market sell-off.
Strong dollar and recession fears served as the key bearish catalysts for the major sell-off in silver markets.
Silver needs material upside catalysts to change the current trend.
Silver Declined To Lowest Levels Since 2020
Silver is moving towards the $19.00 amid a broad sell-off in markets which was triggered by recession fears.
Other commodities are also under strong pressure today. WTI oil is down by more than 7% today, while copper is down by 4%. These commodities are sensitive to economic outlook.
While the supply in the oil market is tight, which has kept WTI oil in the $100 – $120 range in recent weeks, there is no immediate shortage of copper. As a result, copper prices are trading at levels that were last seen back in 2020.
Silver markets are also sensitive to the global economic outlook as demand for silver has a significant industrial component. It should be noted that rising demand for safe-haven assets failed to provide enough support to silver and gold price today.
This is an interesting development as bond yields have dropped today, which is typically bullish for precious metals. Meanwhile, the U.S. dollar moved to 20-year highs. The strong dollar put significant pressure on silver and gold.
What’s Next For Silver?
The strong dollar will be the key threat for silver and other precious metals in the upcoming days. The U.S. dollar managed to gain strong upside momentum against a broad basket of currencies and continues to move higher at a robust pace.
Meanwhile, recession fears may also put significant pressure on silver due to its sensitivity to industrial demand.
The technical factors are also playing against silver, which has settled below the important $20.00 level. RSI has recently moved into the oversold territory, but there is enough room to develop additional downside momentum in the upcoming trading sessions.
At this point, it looks that silver will need significant upside catalysts to change the current downside trend.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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Source: https://finance.yahoo.com/news/silver-price-prediction-silver-retreats-153914208.html