Silver continues to see downward pressure overall and during the trading session on Tuesday with the interest rates spiking in the United States, we have seen silver really take it on the chin.
That's not a huge surprise, it's a non-yielding asset, and that's the main story here as we try to sort out whether or not traders will be able to look past that and focus on supply and demand, or are they going to continue to see a lot of questions about the fact that the non-yielding asset just simply does not offer anything that the bond market can't right now.
After all, most large money managers are perfectly content to put some of their money in a 10-year note that yields 4.655%. So, with that being said, I do think that we will continue to see trouble for silver, but I don't necessarily expect a major breakdown.
What I do expect is a continued downward pressure every time we rally, at least on short-term charts. I think we stay in the same range for a while, with the $70 level underneath operating as a floor in the market.
If we break down below there, then the 200-day EMA becomes the next place we look.
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Watching the 10-Year Yield
With this, I believe that would come with a lot of serious pressure from higher rates in America. But really at this point, one has to wonder whether or not we aren't getting a little overdone in the bond market. If that ends up being the case, then I think you've got a situation where silver could bounce.
But the first thing I do when I look at the silver chart is look at the 10-year yield to see what it's doing. As it continues to rise, I don't have any interest in buying silver, at least not yet. If it does suddenly fall, perhaps on good news coming out of the Middle East, then I would consider buying it.
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