Silver is down nearly 5% on November 6th, 2024. What is happening with silver?
In this article, we look at the silver price and silver market in a few different angles:
- We compare silver’s decline today with other key markets and assets.
- We look at the silver price chart.
- We check if there is silver related news that might explain why silver is down today.
- Based on the above findings, the conclusion is that the VIX is the primary driver of the decline in silver.
Silver down on November 6th, 2024
First things first, can we put the silver decline in perspective?
Below is the market carpet for November 6th, 2024.
Silver is down today, and it’s among the strongest decliners. All precious metals and base metals are down.
There is a commodity sector decline, visibly.
An explanation why silver is down today is clearly due to one of the strongest risers of the day, i.e. the US Dollar (left bottom). The USD is inversely correlated to metals and most commodities.
Silver chart – silver down after hitting resistance
Upon checking the silver chart, it is clear that silver is now back testing its breakout level.
On November 6th, 2024, silver broke down below its breakout level at 32.7 USD/oz (silver futures).
Another explanation why silver is down might be related to silver chart dynamics – the silver breakout at 32.7 USD has to be back tested (a very common chart dynamic). Investors need to watch the 3 to 5 day micro pattern that will become visible around 32.70 USD.
Silver not in the news, gold in the news
There is a lot of news today, not about silver but about gold, inversely correlated to the USD:
- Gold retreats as dollar surges on Trump victory, eyes on Fed (Reuters)
- Why U.S. gold demand softened heading into Election Day (Marketwatch)
It looks like there is nothing going on in the precious metals market, reinforcing the chart dynamics in silver combined with the VIX reacting as a result of US elections fever.
This might explain why silver is down.
USD bounces sharply as a result of US elections
As we look at one of the leading indicators for markets, the USD, we observe a very bullish pattern, bearish for markets & metals. While the USD has a very strong candle, it is also about to hit very strong resistance.
Is our silver outlook affected
Our silver forecast is bullish, and remains bullish.
While this article is focused on the very short term (why is silver down today), our overall focus tends to be long term:
- Silver Is Moving Above $30 an Ounce. Can Silver Move To $37.70 This Year? Silver is expected to consolidate around $30 for a while, presumably that’s what’s happening now.
- When Exactly Will Silver Hit $50 An Ounce? Our expectation for silver to hit $50 is still valid, long term though.
- Silver: Long Term Chart Now Officially The Most Powerful Bullish Reversal In History. Long term silver charts are not affected by the silver being down in recent days.
We suggest to zoom out, and not to be focused on the short timeframes which obviously constantly bring up the question ‘why is silver down today‘ and ‘silver is down, what is happening.’
