Silver is down nearly 3.2% on December 18th, 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 December 18th, 2024
First things first, can we put the silver decline in perspective?
Silver moved strongly higher in 2024.
Big picture, our viewpoint is that silver remains in an uptrend as long as it trades above 27.70 USD/oz.
Short term, however, silver is facing headwinds. All precious metals and base metals are down today.
An explanation why silver is down today is clearly due to the outlook that the FOMC created today. While the market was expecting 3 to 4 rate cuts next year, the FOMC is projecting only 2 of them.
The USD moves strongly higher, hitting markets and metals which are inversely correlated to the USD.
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). This same level was resistance last week.
Another explanation why silver is down might be related to silver chart dynamics – the silver breakout at 32.7 USD invalidated. Investors need to watch the August, September, and November lows now to act as support.
Silver not in the news, USD in the news
There is a lot of news today, not about silver but about gold, inversely correlated to the USD:
- Stocks tumble after Fed cuts rates, signals slower cut pace (Reuters)
- Fed Just Cut Interest Rates But Signaled Fewer And Slower Future Cuts (Forbes)
It looks like the US Dollar effect post-FOMC decisions today is the beneficiary. That’s because less rate cuts make the USD stronger.
This explain why gold and silver are down, but also stocks.
USD bounces sharply as a result of today’s FOMC decisions
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 may also hit strong resistance here at 108 points.
Is our silver outlook affected
Our silver forecast is bullish, and remains bullish.
It might be delayed, especially when exactly silver will hit 50 USD an Ounce. There is nothing wrong with this.
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.’
