Gold experienced its biggest sell-off this year yesterday. And it was a similar story for silver. But in its role as gold’s unruly sibling, silver’s sell-off was sharper. Silver hit an all-time intra-day high of $54.60 last Thursday. Since then, it has plunged, trading down to a low of $47.50 in overnight trade. That represents an overall decline of 13%, suggesting that it has ‘corrected’ according to the standard definition. Yet it may still be too early to say that the selloff has completed.
While the daily MACD has turned down sharply, it remains in overbought territory. That could mean that prices have further to fall. But the MACD could also reset at lower levels and thereby set up a base from which silver can rally further, simply by consolidating around current levels. It’s also worth noting that within this decline, and as with gold, there have been some sharp rallies.
Source: TN Trader
Overall, market participants appear divided between those viewing the recent dip as a buying opportunity and others cautious about further downside. Both precious metals remain prone to violent moves in both directions as sentiment switches back and forth. While this move has been painful for the bulls, it was long overdue. The question for them now is whether precious metals have another rally in them, with the possibility of fresh records to come, or if the top is already in and a new bear market is dawning.
