Silver Sell-off Accelerates; Price Targets $14.60

Technical Sentiment: Bearish

Key Takeaways

• Precious metals remain under extreme selling pressure, seeking fresh multi-year lows;
• Silver tumbles after breaking below $16.66 and $16.00;
• Huge 8-year pivot at $14.60 could offer sufficient support for a bounce higher;

The US Dollar rose again against a basket of currencies on Wednesday, increasing bearish pressure on Gold and Silver. This slide lower is expected to continue for a few more days.

Technical Analysis

Silver has experienced an incredibly fast and aggressive sell-off since early July this year. Price is showing no signs of stopping or correcting higher, despite shedding nearly 29% of its value during this period, down from $21.56 to current Spot price at $15.40.

Despite slowing down to a halt throughout October, Silver kept a very bearish profile, unable to correct higher on nonexistent buying pressure. Sell-off resumed on 30^th October, with price quickly tumbling $16.66 and ultimately exceeding our forecast at $16.00. Lacking any bullish bounces, Silver appears to be heading straight to $14.60, where we can identify a huge support level also acting as a pivot zone. A temporary bounce, possibly even a medium-term recovery, should be expected starting from this support area.

Stochastic is located in extremely oversold territory on Daily, Weekly and Monthly timeframes. That being said, traders should remain patient before loading up on long positions, since there are no price action confirmations for a bottom.

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Prepared by Alex, Currency Strategist at Capital Trust Markets