The silver market fluctuated throughout Thursday’s trading session as erratic trade activity and a significant challenge of the $18 level continued. The $18 level below should provide support, but if we were to break through it, I believe it would open the door to significant selling pressure. Currently, rallies are dubious, and I believe they will be influenced in one way or another by the US dollar, given the strong negative correlation between the greenback and silver.
The silver market must also be concerned about industrial demand, which will almost surely decline due to the global economic slowdown. The industrial demand for silver will decline, and it is worth mentioning that the Philadelphia Fed Manufacturing Index came in much lower than expected, indicating even more demand destruction.
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If we were to break below the $18 level at this time, I believe the door would open to the $15 level. With the 50-day exponential moving average (EMA) entering the picture at the $19.31 level, I believe this provides a bit of a short-term limit. This is followed by the $20.00 threshold, which has a great deal of psychological significance as a large, round figure. Given sufficient time, I am convinced that we need to examine this scenario through the lens of the association between the US dollar and silver more than anything else.