Key Insights
Global commodity markets are under strong pressure today.
Gold/silver ratio has firmly settled above the 90 level, which is bearish for silver.
Silver has a decent chance to settle below the $19.00 level and move to new lows.
Silver Retreats As Recession Fears Bite
Silver is currently trying to settle below the $19.00 level amid a broad sell-off in commodity markets.
The sell-off was triggered by the weak ZEW Economic Sentiment Index report from Germany. Economic Sentiment in Europe’s leading economy fell below levels that were reached during the acute phase of the coronavirus pandemic.
Commodities that are sensitive to economic outlook, like WTI oil and copper, are under strong pressure today. Silver is also sensitive to global economic outlook as industrial demand has a 49% share in the total demand for silver.
The U.S. dollar has lost some ground after testing new highs, but this move did not provide any material support to silver markets. Traders remain focused on recession risks, which are pushing silver towards new lows.
What’s Next For Silver Markets?
As we have discussed yesterday, silver traders will focus on the U.S. Inflation Rate report, which will be released on Wednesday. Traders will also keep an eye on the developments in gold markets, which highlight the strength of demand for safe-haven assets in the precious metals space.
At this point, the money flows into the U.S. dollar and U.S. Treasuries. Demand for gold is weak. As a result, gold moved from the $1810 level to the $1730 level in just one week.
Gold/silver ratio has recently settled above the 90 level. Back in March 2020, gold/silver ratio touched highs near the 125 level, so the situation can get worse for silver in case global recession risks materialize.
Currently, the silver market mood is bearish, and silver will clearly need significant upside catalysts to break 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-tests-152333459.html