Silver fell hard on Wednesday, as interest rates jumped in early Wednesday trading, as the Americans attacked Iran again, driving concerns of inflation higher.
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Silver collapsed during the trading session on Wednesday as we continue to see a lot of concerns around the world when it comes to the Middle East, with the Americans attacking the Iranians again, certainly not helping the situation, as interest rates have jumped. That is toxic for silver, and now you're starting to see silver really drop. Breaking below the $57 level for me kicks off a potential leg lower, perhaps as low as $50. I do think silver eventually visits $50 one way or the other, and it might be Donald Trump to make it happen; you just don't know.
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The market turning around and recapturing the $60 level would be a strong sign, but we'll just have to see whether or not that can actually happen. Even then, I would be a little bit leery. I think we need to see the market perhaps break above $63 to really convince me, and even then, I think you have concerns about the 200-day EMA as well as the $70 level, both causing some problems.
In general, this is a market that, given enough time, I do think will test 50 because it's been so important historically, and then it'll be interesting to see whether or not we can defend that. I do like silver longer term. I think there is a massive problem with a lack of supply when it comes to silver, but right now, clearly, the supply and demand situation is not something we are watching. We are still watching interest rate markets and, by extension, the US dollar, which has been relatively strong. I do not like the idea of getting into a big position, but I do favor the downside at least in the short term. I'd like to see us break down below $57, though, because I think that will really start to have the market take off.
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