Silver was down more than 4% on October 8th, 2024. Silver lost exactly 9.0% between its intraday day high on Friday, October 4th, 2024. What is happening with silver?
In this article, we look at the silver in a few different ways:
- We compare silver’s decline today with other key markets and assets.
- We look at the silver 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 USD is the primary driver of the decline in silver.
October 9th, 2024 – It became clear in overnight trading why silver came down nearly 10% between Oct 4th and 8th: China’s market crash dragged commodities down. Scroll down to see the silver chart as well as the China news that pushed silver lower. We conclude this article with the question if we are concerned about silver.
Silver down on October 7th & 8th, 2024
First things first, can we put the silver decline in perspective?
Below is the market carpet for October 8th, 2024.
Note – this is a snapshot, and it’s taken in pre-market trading in futures markets (incl. silver futures price).
Silver is down today, and it’s among the strongest decliners. Interestingly, other metals (copper and palladium) and commodities (crude oil and gasoline) are down to a similar extent like silver.
There seems to be a commodity decline ongoing, which might not be specific to silver only.
An explanation why silver is down today might be that commodities like metals and oil are facing headwinds, sort of a sector wide effect.
Silver chart – silver down after hitting resistance
Upon checking the silver chart, it is clear that silver hit major resistance, two trading days ago.
On Friday, October 4th, 2024, silver printed a double top right at 33.3 USD/oz in silver futures (a slightly lower reading in spot silver).
Another explanation why silver is down might be related to silver chart dynamics. When resistance is hit, a drop is very often a likely effect.
Silver not in the news
There is no particular news about silver, certainly no silver specific news that might explain why silver is dropping today, on October 8th, 2024.
If we look broader, and include gold, we find some news popping up:
- China stock rally fizzles as stimulus optimism fades; Shanghai Composite slides 5% (Oct 9th)
- China’s Stock Market Fever Breaks as Authorities Disappoint (Oct 8th)
- China’s gold reserves unchanged for fifth straight month in September (Oct 7th)
- Gold falls as stronger US jobs data shrinks hopes of big Fed rate cut (Oct 4th)
It looks like a drop in commodities happened, on Oct 8th, 2024, because China officials refused to further stimulate their economy. This sector wide weakness in commodities affected silver as well.
This might explain why silver is down.
USD bounces sharply as of October 1st
As we look at one of the leading indicators for silver, the U.S. Dollar, we a sharp bounce started on Oct 1st, 2024.
A final explanation why silver is down today is clearly the intermarket dynamics between the USD and gold/silver.
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.’
