Silver prices continue to drop, as the precious metals sector falls further out of favor. At the time of this writing, Silver futures are trading around $17.50/oz, down 0.34.
This drop follows Friday’s steep drop in silver prices and seems to be getting the attention of market participants and followers, including some readers that have tracked my work on Silver. A higher dollar and weak Euro zone seem to be getting most of the blame, but there is more going on here, especially from a technical price perspective.
A few weeks back, I posted a series of charts highlighting why Silver may be headed to $14 per ounce area. And, furthermore, why the $14 area may offer a buying opportunity. At the request of some readers, I’m going to provide a quick chart update that simplifies things… The chart below highlights the math, as well as the form/proportion that is playing out in Silver. Click to enlarge.
Silver Spot Prices – Weekly Chart
Near term, I would expect to see some consolidation or even a bounce in Silver prices. That bounce should get rejected by the former support around $18 and change (now resistance). And should the coming bounce get rejected as I suspect, then the stage would be set for a final drop towards my 14 dollar target. Stay tuned. I’ll try to provide an update as the situation develops. Please feel free to share your comments and questions.
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.