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US Silver declines as negative correlation to the US$ continues

Silver fell again during the trading session on Tuesday, as we are now below the 200-Day EMA.

This is a very negative sign, and now it looks like we could be threatening the $22.60 region, an area that has been important more than once. If we were to break down below there, then we would almost certainly test the $22 level, which is a large, round, psychologically significant figure, and the absolute bottom of the overall range. Anything below there would have silver dropping quite drastically, perhaps all the way down to the $20 level.

Silver is also an industrial metal, so this could be partially in reaction to the idea that the global economy is slowing down, if that’s the case then the demand for silver will almost certainly drop as well. In that scenario, you’ve got a situation where a strengthening US dollar and a lack of demand could be very toxic.

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