As usual many of the observations regarding gold set out in the parallel Gold Market update apply equally to silver, so they will not be repeated here.
On silver’s 6-month chart probably the most important point to note is that, following gold’s failed attempt to break above the key $2100 level early in December, silver has dropped away whereas gold has broadly moved sideways marking out a potential top area. This shows relative weakness on the part of silver and on the chart we can see that it is already dropping away again beneath the trendline shown with its moving averages rolling over into bearish alignment. So if gold breaks down from its Head-and Shoulders top pattern as expected, then silver is likely to drop at least
to the next significant support level in roughly the $20 - $21 area.
The longer-term 2-year chart gives us more perspective and on it we see that silver has essentially been stuck in a trading range for over a year – since late 2022. If gold breaks down from the Head-and-Shoulders top that we looked at in the Gold Market update and drops away, then we can expect silver to drop at the same time at least to the support level in the $21 area.
The long-term outlook for gold and especially silver remains most favorable and the current retreat by both metals appears to because the markets believe that the US is gaining the upper hand geopolitically through its proxy war against Russia in the Ukraine and now against Iran and the BRICS in the Mid-East and in so doing maintaining the dominance of the dollar. However, this does not alter the extremely negative underlying trends resulting from the hopeless and terminal corruption that plagues the entire US economy and system manifesting in an exponential explosion in money creation that has now gone vertical, a doddering joke of a President who makes no decisions and signs whatever is pushed in front of him and an explosion in unchecked immigration that will eventually lead to social breakdown. In other words, the country is destroying itself. All of these factors will eventually lead to the complete collapse of the dollar and gold and silver exploding higher. There are a lot of countries that “have a score to settle” with the US that is now increasingly isolated as a result of its supporting the genocide of the Palestinians, and they have only to bide their time until the US collapses in on itself and is no longer able to afford its vast network of military bases and overseas campaigns, whereupon Israel will find itself isolated and in an even worse position than the Palestinians and they can expect little sympathy after what they have done. After 76 years of “getting away with it” this is the point at which they will finally learn the meaning of the word “karma”.